This article explains how bill agreements control the rates you invoice clients for filled job orders, how they use the agreement hierarchy in Rates and Rules, and how the system interprets pay, oncosts, and margins to calculate the final bill amount.
Understand and Use Bill Agreements
What a Bill Agreement Is
A bill agreement is a binding statement that defines the rates an agency uses to bill or invoice a client for supplying workers to a specific job order. It determines how much the client is charged based on the payee’s wages and any markup or margin applied.
Bill agreements are configured in Rates and Rules and assigned to a specific level of the agreement hierarchy. The level and value in the hierarchy determine whether a bill agreement applies to a particular job order.
For example, a bill agreement assigned to the country value Sweden can be applied only to job orders that also belong to the country Sweden. It cannot be used for job orders belonging to other countries.
The outcome of the pay agreement interpretation process provides the wage details (pay codes and pay rates) that form the basis for the bill agreement calculation.
📌 Note: A bill agreement defines how you charge the client; a pay agreement defines how you pay the payee. The bill agreement calculation starts from the pay agreement result, then adds oncosts and margins as configured.
Bill Agreement Headers and Bill Rate Rules
A bill agreement is made up of:
Bill agreement header
Defines general attributes such as:
The validity period of the agreement.
The level of the agreement hierarchy the agreement belongs to (for example, country, brand, client, or payee).
Multiple bill agreement headers can be created at each level of the agreement hierarchy.
The validity period of a bill agreement header cannot overlap with another bill agreement header at the same level of the hierarchy.
Bill rate rules
Each bill rate rule belongs to a specific bill agreement header.
A bill rate rule defines the conditions of the bill agreement, including:
The type of markup or margin used in the calculation.
Whether the markup applies to:
All pay codes.
A specific pay code type only.
A specific pay code only.
How Bill Agreements Work with Job Orders
Assigning Bill Agreements to Job Orders
When a job order is filled in Recruitment Manager, a bill agreement must be assigned to the job order before you can submit it to timesheet.
Bill agreements are assigned to job orders via the Pay/Bill tab of the Job Order screen in Recruitment Manager. The list of bill agreements shown is filtered to include only those that are applicable to the job order, based on the agreement hierarchy values.
Open the job order that has been filled in Recruitment Manager.
Go to the Pay/Bill tab on the Job Order screen.
Assign the bill agreement that applies to this job order.
Once a valid bill agreement is assigned, submit the job order to timesheet.
Example: How the Bill Amount Relates to Pay
The bill agreement uses the results from the pay agreement to calculate the bill amount.
A payee works a total of 38 hours in a week.
All time is linked to the pay code ORD.
The pay rate for ORD is $28.00 per hour.
The wage cost is:
38 hours × $28.00 = $1,064.00.
The agency must pay the payee a gross sum of $1,064.00 for the week. The client is then billed at least this amount to cover the payee’s wages, plus an additional markup or margin so the agency can make a profit. The markup or margin used is determined by the bill agreement attached to the job order.
How Rates and Rules Interprets Bill Agreements
1. Checking the Bill Agreement Conditions
When Rates and Rules interprets a bill agreement for a job order, it first checks which bill rate rule conditions are applicable.
The system starts from the level of the agreement hierarchy where the bill agreement header is defined.
It then searches downwards through lower levels of the hierarchy for a valid bill rate rule.
The lowest-level valid bill rate rule it finds 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 (the next level down from country).
It continues searching through each lower level until it reaches the last level of the hierarchy.
If it finds a valid bill rate rule at the payee level for the payee who filled the job order, the payee-level bill rate rule is applied because the payee level is the lowest level of the hierarchy.
2. Applying Pay Codes and Pay Rates
Once the relevant bill rate rule has been identified, Rates and Rules uses the pay data from the pay agreement interpretation:
It identifies the pay codes and pay rates that were generated by the pay agreement.
It calculates the wage cost that must be included in the bill amount to cover the payee’s wages.
This wage cost is the base amount to which oncosts and margins may be added.
3. Applying Oncosts
Oncosts are additional ongoing costs the agency incurs due to employing a payee, on top of the payee’s wages. Examples include:
Superannuation.
Insurance costs.
Depending on the bill agreement’s conditions, some or all oncosts may be passed on to the client.
Each oncost that might be incurred is configured in Rates and Rules and assigned to a pay code.
When interpreting a pay-dependent bill agreement, Rates and Rules:
Checks whether the pay codes passed from the pay agreement interpretation are associated with bill oncosts.
If they are, automatically adds the relevant oncosts to the wage cost used for the bill calculation.
The result is a combined cost of wages + oncosts.
4. Applying Margins and Calculating the Bill Amount
After any applicable oncosts are added:
The markup or margin defined in the applicable bill rate rule is applied.
The system calculates the bill rates and adds the markup or margin to the wage cost plus oncosts.
Key points:
Each bill rate rule can calculate the markup or margin in different ways.
A single bill rate rule can define different markups or margins depending on specific conditions (such as pay code, pay code type, or other criteria).
Once the bill amount is calculated:
The final bill amount is created based on wages, any applicable oncosts, and the configured markup or margin.
This bill amount is passed to the Billing application, which generates an invoice using this information.