Variance Pricing Setup Requirements

Before entering retroactive rate changes for your contract lines, you must first complete the following steps required by the variance pricing process:

  1. Assign rate-based contract lines to the contract.

  2. (Optional) Create a rate set category that is used during the Variance Pricing process.

  3. Create a standard or contract-specific rate set or rate plan.

    Optionally assign a rate set category to the rate set.

    Assign the rate set or rate plan to the applicable contract lines.

    Enable Variance check box selected. To bill and recognize revenue for contract-related direct and indirect costs, you must create a billing rate set (if not using the cost/billing rate set) and a revenue rate set if you have selected the Separate As Incurred Billing and Revenue check box on the contracts.

    Because you can assign only one rate set or rate plan to a rate-based contract line at one time, you will most likely combine your cost, billing, and revenue rate sets onto a rate plan in a manner that meets your pricing needs, and assign the rate plan to your rate-based contract lines.

    Note:

    Rate sets that are eligible for variance pricing cannot have the same field values for analysis type, source type, category, or subcategory for both the source and target definition criteria. At least one value must be different between the source and target row.

  4. Assign active projects and activities to your rate-based contract lines.

    Transactions for rate-based contract lines are tracked using projects and activities associated with the contract line, and stored in the PROJ_RESOURCE table.

  5. Set the contract to an active processing status and process transactions.

    Transactions that are eligible for variance pricing are project-related transactions associated with rate-based contract lines that are processed through Project Costing. To process transactions for contract and rate-based contract lines you must also define as-incurred billing and revenue plans and assign them to the applicable rate-based contract lines for billing and revenue processing for your transaction.