An Illustration of a Bill Factor and Its Characteristics

The following picture illustrates how a bill factor and its characteristics are used to retrieve the relevant state tax at billing time:

The following points describe the illustration:

  • At billing time, the billing engine sends a request to a rate to calculate the charges for a customer's consumption.
  • The rate calculates charges without bill factors until it encounters the calculation rule that levies state tax. This calculation rule references a bill factor. This means the rate must get the tax rate(s) in effect during the billing period from this bill factor.
  • The state tax bill factor contains an attribute defining that the premise's taxing state characteristic controls the bill factor value. The bill factor therefore extracts the taxing state from the premise.
Note:

Deriving characteristic values. Rather than have the system extract the characteristic value from an entity, you can setup the system to derive the characteristic value when the rate is calculated. For example, if all of your customers are located in a single state, you may not want to maintain the taxing state on every premise. To do this, you could setup the rate to "hard code" a taxing state of say Hawaii. This is an advanced topic, but it may prove useful for your implementation. Refer to Deriving / Passing In Characteristic Values for the details.

  • The premise returns the taxing state and the bill factor extracts the tax rate(s) in effect during the bill period and returns them to the rate.
  • The rate applies the tax percents and returns the charges to billing.
Note:

Some bill factors don't need a characteristic. There are bill factors whose value does not differ based on a characteristic. For example, if your organization offers employee discounts, the discount percent is probably the same for all employees and therefore this bill factor doesn't need a characteristic to select the bill factor value at billing time. However, because of the relational design of the system, every bill factor value must reference both a bill factor and a characteristic value. Therefore, if you have bill factors whose value is not related to a characteristic, you must specify a characteristic type on the bill factor with a characteristic value that is exactly the same as the characteristic type. Refer to Employee Discounts for an example.

Fastpath:

For more information about setting up characteristics, see Setting Up Characteristic Types and Their Values .