Bill Agreements

A bill agreement is a binding statement that determines the rates that an agency bills or invoices their client for providing workers for a specific job order.

Bill agreements configured in Rates and Rules are assigned to a specific level of the agreement hierarchy. The level of the agreement hierarchy and hierarchy value to which a bill agreement is assigned determines if the bill agreement is applicable to a job order. For example, a bill agreement belonging to the country of Sweden can be applied to a job order belonging to the country of Sweden. However, the bill agreement could not be assigned to job orders belonging to countries other than Sweden.

When a job order is filled in Recruitment Manager, a bill agreement must be assigned to the job order before the job order can be submitted to timesheet. The list of bill agreements that can be assigned to the job order is filtered according to those that are applicable to the job order, based on the agreement hierarchy values that apply to each agreement.

Note that bill agreements are assigned to job orders via the Pay/Bill tab of the Job Order screen in Recruitment Manager.

The outcome of the pay agreement interpretation process is used as the basis for calculating how much the client will be billed.

For example, a payee worked a total of 38 hours in a week, with all time being attributable to the pay code ORD. If the pay rate for the pay code ORD is $28.00 per hour, the agency must pay the payee a gross sum of $1064.00 for the week. Therefore, the client will be billed $1064.00, to cover the cost of the payee's wages, plus a markup/margin to allow the agency to make a profit. The markup/margin that applies depends on the bill agreement that applies to the corresponding job order.

A bill agreement is configured in Rates and Rules by creating a bill agreement header which groups together one or more bill rate rules. The agreement header defines the general attributes of the bill agreement, such as the validity period of the agreement and the level of the agreement hierarchy to which the agreement belongs.

Multiple bill agreement headers, and therefore bill agreements, can be created at each level of the agreement hierarchy. However, the validity period of a bill agreement header cannot overlap that of another bill agreement header belonging to the same level of the agreement hierarchy.

A bill rate rule belonging to a bill agreement header defines the conditions of the bill agreement. For example, a bill rate rule defines the type of margin markup that the agreement applies and whether the markup applies to all pay codes, a specific pay code type only or a specific pay code only.

The process whereby Rates and Rules interprets and applies a bill agreement is summarised in the diagram below.

Each of the stages shown in the diagram above are described below.

Checking the Bill Agreement Conditions 

Rates and Rules checks which conditions of the bill agreement assigned to the job order are applicable. This is done by searching the agreement hierarchy for a valid bill rate rule at any level of the hierarchy below that to which the bill agreement header belongs. The lowest-level valid bill rate rule is applied.

For example, if the applicable bill agreement belongs to the country level of the agreement hierarchy, Rates and Rules begins searching for a valid bill rate rule at the brand level of the hierarchy, which is the next level down from the country level. The application continues to search for a valid bill rate rule until it reaches the last level of the agreement hierarchy and applies the lowest-level valid bill rate rule that can be found. Therefore, if there is a valid bill rate rule defined at the payee level for the payee who has filled the job order, the application applies the payee level bill rate rule because the payee level is the lowest level of the hierarchy.

Applying Pay Codes and Pay Rates 

Once the relevant bill rate rule that will be applied within the bill agreement is identified, Rates and Rules identifies the pay code and pay rates that were generated because of the pay agreement interpretation. This allows the bill agreement interpretation process to identify the wage cost that must be include in the bill amount to cover the cost of the payee’s wages.

Applying Oncosts 

Oncosts are additional on-going costs that an agency incurs because of employing a payee. These are costs that are additional to that of paying the payee’s wage. Examples of possible on costs include superannuation and insurance costs.

Depending on the conditions of a bill agreement, oncosts may be passed on to clients. If oncosts are passed on to clients, each relevant oncost to be passed on must be configured within Rates and Rules. Each oncost that may be incurred is assigned to a pay code. Therefore, when interpreting a pay-dependent bill agreement, Rates and Rules checks if the pay codes passed from the pay interpretation process are associated with bill oncosts. If the pay codes are associated with bill oncosts, the relevant costs are automatically added to the pay cost that will be used in the bill calculation.

Applying Margins and Calculating the Bill Amount 

Once any applicable oncosts have been applied, the markup/margin and bill rates, as defined in the applicable bill rate rule, are applied and added to the wage cost plus any applicable oncosts.

Each bill rate rule can calculate the markup/margin to be added to the final bill amount in different way. A single bill rate rule can define different markups/margins depending on the specific conditions that apply.

Once the bill amount is calculated, it is ready to be passed on to the Billing application which will generate an invoice based on the information.