Project billing
Bill a customer for project work from a project contract, as time and materials, cost plus a fee or a fixed price, and recognize its revenue by progress.
A bills the work charged to a project. Its lines are contract line items (CLINs), and each line's Billing Method decides how it bills:
| Billing method | What the invoice bills | Price |
|---|---|---|
| Time & Materials | Hours and costs charged to the line's billing element and the elements below it | Hours × a bill rate; material and other direct cost × (1 + handling %) |
| Cost Plus | Every cost of the billing element and the elements below it | Cost × (1 + fee %) |
| Fixed Price | The line's billing events | The line's price |
Time & Materials is included in every plan. Cost Plus needs the Business plan. The project to cash guide walks one project from its contract to its revenue.
Project contracts
Sales → Agreements has two lists. A service contract bills Service items on an invoice schedule. A project contract, under Project Contracts, bills one project over a period of performance. A service contract refuses a Time & Materials or Cost Plus line, and a project contract refuses a recurring line: every project contract line is one-time.
Start one with Add Project Contract on the list, or with New Project Contract on the project's Billing page. The setup has four steps:
Details. The customer, the Project (required), the name, the customer's Contract Number, and the Period of Performance: Start Date and End Date. Next saves the contract as a draft.
Lines. One row per CLIN: description, billing method, billing element, funded amount, ceiling, fee or handling, price (Fixed Price only) and revenue method. Add Line opens the line form; click a cell to change it.
Invoicing. The bill-to and payment terms, the Billing Period and the invoicing mode. Each calendar billing period is invoiced after it ends. With a Fixed Price line, the step also holds its billing events.
Review. A summary and a list of gaps, each linked to its fix.
"Confirm" stays disabled while a gap blocks it: no line, a Time & Materials or Cost Plus line with no billing element or an element not marked as a billing element, a project whose cost treatment is not Contract, a contract currency other than the base currency, or billing events that do not add up to their line's price.
A labor category with no bill rate and an empty Project WIP, Deferred Revenue, Contract Assets or Contract Loss Provision default account are warnings only.
On the contract page, the properties show the period of performance and the billing period, the Details tab leads with the Project Billing card, and the summary shows Funded in place of the contract value.
The billing line
On a project contract, open a line and set Billing Method to Time & Materials or Cost Plus. The line has no quantity or rate; it bills its items instead.
The Fixed Price line takes a Price instead of a billing element and funding. A billing line needs the contract to be in the company's base currency. On an Active contract you add or end a billing line with Amend (its Billing Terms row action sets the method and terms); its other terms do not change there. Edit Funding, in the ⋯ menu of the line's billing page, changes the funding at any time.
Bill rates
An hour on a Time & Materials line bills at the most specific rate in effect on the day:
- the line's rate for that employee;
- the line's rate for the employee's labor category;
- the labor category's default Bill Rate (Projects → Labor Categories).
Set the line's rates in the Labor Rates grid on its billing page. Add Rate adds a row, and Applies To names the labor category or the employee. An hour with no rate at all waits On Hold with the reason "No bill rate". Machine, overhead and burden cost is not billed on a Time & Materials line: a bill rate already covers it.
Billable items
Each cost charged under the billing element becomes a billable item: Unbilled, On Hold, Billed or Written Off.
- A Time & Materials item is made when the cost posts. Cost from a job's completion or backflush gets its item at the next billing run.
- A Cost Plus item is made by the billing run.
- Generate Billable Items on the line's billing page makes the missing items now, for work posted before the line existed or not picked up yet.
Review items on the Billing tab of Projects → Approvals, or on a project's Billing page, under Costs in the project sidebar. Select items and choose Hold (with a reason), Release, Write Off (with a reason) or Edit Price (one item). Each change is recorded in the audit log.
Approvals shows while items wait as Unbilled or On Hold, for a user who can update projects and view sales, and its count includes them. The Billable Items card of the line's billing page and the project Overview's Needs attention card link to that tab.
Invoicing
The daily billing job drafts one invoice per contract for its billing lines, for the Unbilled items posted up to the latest billing period end (from the contract's Billing Period). It groups labor by labor category and rate, and other cost by cost type, then marks the items Billed. The invoice then follows the contract's invoicing mode, as any invoice does.
- Billing stops at the funded amount. Items past it stay Unbilled with the reason "Funding limit".
- Deleting the draft, or voiding the posted invoice, returns its items to Unbilled. An invoice that bills them again is held, so it is not posted without a review.
- The contract's Project Billing card lists each billing line with its funding and every invoice that billed them. Backup on an invoice lists every item behind it, with the posting date, element, cost type, employee, labor category, hours and source document, and exports to CSV.
Fixed Price billing events
A Fixed Price line bills its price on billing events: the invoices planned on the contract's Invoicing step. A new line starts with one event for its whole price. While the contract is a draft, add, split or move the rows of the Billing Events grid; each line's rows must add up to its price before "Confirm".
The daily billing job drafts each event on its date, and Invoice on the contract page drafts what is due now, with the project billing invoice. For Percent Complete, the line's price is the sum of its events.
Funding notices
Once a day Carbon adds the cost incurred under each billing element to the cost it expects over the notice window (the average daily cost of the last 90 days, capped by the plan's remaining cost when the element has a plan). When that reaches Notice At of the funded cost, the contract's sales person and the project's manager get a notice in the app and by email. A second notice goes out when the funds will run out within the window. A change to the funded cost starts a new cycle. This follows the notice clauses FAR 52.232-20 and 52.232-22.
Revenue
The monthly revenue recognition run (Accounting → Revenue Recognition) recognizes a billing line by its Revenue Method, whether or not the work is invoiced yet:
| Revenue method | Revenue to date |
|---|---|
| Right to Invoice | The billable items of the work posted by the month end, less written-off items |
| Percent Complete | Price × (cost to date ÷ estimate at completion) |
Each month recognizes revenue to date less what earlier months recognized, so a write-off or a new estimate shows as a catch-up, negative when it has to be. Revenue billed in advance comes out of Deferred Revenue; revenue not billed yet goes into Contract Assets.
For Percent Complete, the estimate at completion is the billing element's Estimate on the project's Costs page. The price of a Fixed line is its scheduled invoices; the price of a Cost Plus line is the estimate × (1 + fee %), capped at the Ceiling.
- Cost. The same run moves the line's cost from Project WIP to cost of goods sold, so revenue and its cost land in the same month. It moves each cost once. A cost posted to an expense account, or with accounting off, stays where it is.
- Loss. When the estimate is above the price, the run provides the whole forecast loss at once and adjusts it each month as the work progresses. It posts to the Contract Loss Provision account under Accounting → Default Accounts.
- Review. A run's page lists each project line with its estimate, price, progress, earned to date, this month, cost relieved and loss provision change before you post. A Draft run also shows a Journal card: what posting it will write, by account. The project's Billing page shows each line's Progress and Revenue, and the contract's Project Billing card shows Revenue.
- Project. A Contract project with a confirmed project contract shows a Contract card on its Overview, under Budget: a funding bar and the Funded, Cost, Billed, Unbilled and Revenue figures.
Percent Complete and the loss provision need the Business plan.