Charge Based Billing
Charge-based billing provides a flexible, rules-based approach to track project activities and automatically generate charges that can be included on invoices. Companies create charge rules specific to each project or contract. These rules define how charges are calculated based on various factors such as milestone completion, project progress, time, expenses, or fixed amounts.
Common Challenges Addressed by Charge-Based Billing
- Cash Flow and Profitability: Effective billing impacts cash flow and profitability. Automating billing ensures timely payments and better financial management.
- Data Accuracy: Manual processes lead to errors. Automating billing helps maintain accurate records of project activities.
- Complex Contracts: Different projects may have varying billing methods (fixed fees, time and materials, milestones). Managing these contracts manually can be challenging.
- Approval Processes: Efficient financial controls are crucial. Automation ensures proper approvals and reduces delays.
Generating Charges in NetSuite
- During the midnight charge run, NetSuite automatically generates both actual charges and forecast charges for all projects.
- Forecast charges are used for calculating sales forecasts on reports and estimating costs, revenue, and profit on the project record.
- Charges can be generated based on time transactions, expense reports, or other project-related activities.
- You can also manually generate charges using the Generate Charges button on the project record.
- Charges take into account the time zone of the company or subsidiary.
Considerations:
- For time-based charges, if the department, class, or location of the time transaction is not available in the project’s subsidiary, the new charge won’t have those fields set.
- For expense-based charge rules, if the department, class, or location of the expense report is not available in the project’s subsidiary, default values are used.
- Forecast charges are automatically updated when project plans change, or new charge rules are created.
In summary, charge-based billing streamlines invoicing, improves accuracy, and ensures that customers are billed appropriately based on project activities.