Knowledge Base

Milestone-based billing is the billing model common in companies with the project-driven revenues. This type of billing typically occurs only as certain project milestones have been attained. Tracking the milestones using the project gantt chart makes it just as easy to track the billing invoices for the project in the same way as the actual deliverable milestones of the project.

Alternatively, depending on how the payment milestones for your projects are structured, you can bill your clients on specific dates regardless of your project’s progress. This too can be achieved using the milestone-based billing techniques suggested in this manual.

While Celoxis does not provide the out-of-the-box method for the milestone-based billing, the flexibility of Celoxis custom fields will allow you to track your billing cycles with ease, once the proper fields are defined. At the end of this manual you will learn how to

• Use the custom fields to define billing milestones
• Use invoicing reports to track project billing

Custom Invoicing Fields

In this scenario, sending an invoice to the client becomes one of the tasks in the project plan. Using Celoxis custom fields, we will create several additional attributes which will allow you to set a special type of task - an Invoice task. You can create custom fields under Administration ▸ Account Management ▸ Custom Fields ▸ Add ▸ type of field.

Custom Fields on the Administration Page

While the unique needs of your company may require a different set of the attributes, here is the most common set of tasks to consider:

1. Task Type

• Name: Task Type
• Type: Single-select Drop Down
• Drop down options:
• Invoice
• Required financial privilege to view: Yes
• Required?: No
• Formula Key: task_type
• Attached To: Task
• Rational: Eventually you may choose to have other special types of tasks, which is why the single-select drop down is recommended.

This is done on the Timesheet section of the Administration page. You must have the Administration rights to access these settings. Select the appropriate billing model to instantly affect the settings for the entire system.

Company’s billing model

In the User-based model, separate bill rates will be added for every billable user in the system. The rates then will be factored into the billing amounts for the projects, both actual and estimated.

To provide the default billing rate for a user, open the user’s settings and enter the desired hourly amount in the Bill field of the Default Rates ($/Hour) section in the Basic tab

User’s Billing Rate

For every user in the system you can have default/company billing rate which will automatically apply to every project. At the same time, you can override rates for any given user on any given project. See the Other scenarios, and frequently asked questions section for more information on this subject.

The billing amount for this model is calculated by multiplying the number of billable hours entered by each user into the timesheet of the project, by the billing rate of the user.

To provide the default billing rate for the time code, navigate to the Administration page (you must have the Admin privileges) and follow the Time Codes link in the Timesheet section. Enter the desired hourly rate amount into the Bill field. Note that the Bill field will only be available, if the company’s billing model is set to Time code based.

Time Code Billing Rate

Setting up project’s billing type

Celoxis allows you the flexibility to specify Fixed Price or Hourly billing type for each project.

Setting up billing for the Fixed Price projects

In a Fixed Price billing type, the tasks you undertake and bill for, are for a fixed pre-defined price.

To set the project to the Fixed Price type, navigate to the Financials section of the Advanced tab in the Add/Edit Project dialogue. Note that the different billing models are only available to the client projects. For the projects where the client is not specified, the Billing Model field will stay hidden.

Selecting the Fixed Price option from the Billing Model dropdown, opens the new Fixed Price field, allowing you to enter the amount you are planning on invoicing.

When you opt for this type, the ‘billable’ option for expenses and time entries in the project is not checked, by default.

Project’s Billing Type

How rates work for Hourly projects

When you choose Hourly from the Billing Model dropdown, the billing amounts are calculated from the hours that the users log in their timesheets. The bill rate of each user is taken either from user’s settings or from the time code, depending upon the company's billing model.

When this billing type is used, the ‘Billable’ option for expenses and time entries in the project will be automatically checked, by default.

Tracking Actual Billing Amounts

With the billing rates set, the actual billable amount for each task is calculated using this formula, which takes in consideration both the labor and the material bills:

Amount (Act, Billable) of a task = Hours (Act, Billable) × Bill rate + Approved and Billable expenses on the task

Amount (Act, Billable) of the project is calculated from the sum of the amounts of the project’s top tasks. Depending upon the org billing model, the bill rates comes from either the user’s bill rate or from the time codes picked in the timesheet.

Time Code column on the timesheet

Expenses dialogue

For example, if a resource working at the bill rate $30phr reported 10 billable hours for a task, and the project manager approves the $1000.00 billable material expense for the same task, the Amount (Act, Billable) for this task will be calculated as follows:

Amount (Act, Billable) = 10hrs × $30phr + $1000 = $1300.00

Celoxis provides another useful indicator that captures the estimated billable amount for all the labor effort on the project. Amount (Est, Billable) is calculated by using a similar formula, as the sum-product of user's bill rate and estimated hours on that task.

Amount (Est, Billable) of the project is calculated from the sum of the amounts of the project’s top tasks.

Project Billing columns showing Estimated vs Actuals

Note that the Amount (Est, Billable) is available and calculated only when the User based billing model is used. In addition, with the User based billing, if project's billing type is Fixed Price, the estimated billing for the project equals the set fixed price and therefore does not provide estimated billing values at the task level.

For Time code based billing, estimated billing cannot be calculated, thus the Amount (Est, Billable) column is not available.

Celoxis also lets you keep track of time entries and expenses that have been invoiced. The Invoice status of the items for any given task can be seen in the Task Details dialogue.

Expenses Invoicing Status

On the organization level, you can also create a cross-project report that shows per project:

• Amount (Expense, Invoiced)
• Amount (Time, Invoiced)
• Hours (Invoiced)

Invoiced amount-related columns

Manager and Executive Cross-Project Reports

Below are just few examples of the helpful and easy-to-generate reports which can additionally inform you about important billing metrics. Each report can be easily configured, grouped, ordered or turned to a visual chart to your liking.

Billable expenses across all projects

Cross project billing report, including invoiced amount

Cross project billing summary report

Org mix of Hourly vs. Fixed Price projects

Other scenarios, and frequently asked questions

1. What happens if I change the company’s billing model?

   This is a major step that may impact the running projects as well as the visible column of the financial reports. Please refer to the Switching between Billing Models article for the complete list of the potential ramifications.

2. Why are there the "None" options for the company’s and the projects’ billing models?

   The company billing model should be set to None if your organization does not do billing, or if for some reason you do not want to track your billing in Celoxis.
   Setting the billing type to None at the project level means that no billing is done for this particular project. This is helpful for internal project, proof of concepts, or pro bono initiatives.

3. We have different billing rates for certain projects. How can I achieve that?

   You can specify the project-specific billing rates for every user and for every project using More >> Billing Rate function. If the billing rate of the user is not specified for the project, it will default to the rate set in the Edit User dialogue.

4. What happens when there is a billing rate adjustment to the users with projects in progress?

   The actual billing amount for the work already performed will be calculated at the previous rate. The amount of all future work will be calculated using the new rate. If you have any saved entries, and the rate has changed before the entries were committed, the new rate will be used upon commit and approval of the entries.

5. What happens when there is a bill rate adjustment to the time codes with projects in progress?

   Similar to the users’ billing rates, the billing for the work already performed will be calculated at the previous rate. The billing of all future work (including any saved time entries) will be calculated using the new rate.

6. Why some of the time entries and expenses are automatically marked as Billable, while others are not?

   Whenever new time entries or expenses added to the projects, they can be marked as billable or non-billable. The project billing model determines the default behavior for the billable checkboxes.
   

   • Fixed Price model – billable is unchecked by default
   • Hourly model – billable is checked by default
   
   This default behavior takes in consideration that with the Hourly model, the hours must be tracked in order to generate the proper client invoices, while in the Fixed Price model the invoicing is based on the fixed price but is not affected by the actual efforts spent by the project resources.

7. My projects are fixed-price projects. How can I track milestone payments?

   Please refer to the detailed guide on Milestone-based Billing.

8. Do you provide integration with any accounting software?

   Yes, Celoxis has an out-of-the-box integration with QuickBooks Online for managing and recording invoices. Here’s the link to a short video.

Conclusion/Final Points

As with any type of data, the billing in Celoxis depends on the accuracy and thoroughness of the inputs provided by project managers, administrators and other users. Please make sure you take time discussing the parameters of Celoxis implementation before the system is deployed to the organization, to arrive to the most optimal billing model for your company. By the same token, please make sure your project managers are aware of the differences between the project billing model, and are using the correct model for every project. Finally, encourage your project managers to keep an eye on the users, and time codes’ billing rates, to guarantee that the accurate billing data exists across all projects in the system.

The following input and output fields exists in the out-of-the-box configuration of Celoxis to help with your day-to-date billing needs