Extended Pricing Matrix

You can set the billing amount and markup costs for a service invoice based on criteria such as call type, problem type, equipment type, and so on, for non-labor charges. For example, for an emergency call, you might want the ability to charge a higher markup cost. In addition, you can also include a flat rate/fee with zero costs to the service invoice.

You can also have more than the standard five cost codes for service costs, by creating sub cost codes to the Other cost code. Each sub cost code can have its own tax schedule, WIP/COGS accounts, etc.

If you do not use the extended pricing matrix feature, but instead the standard one, all markup is markup on total cost; there are no other options available.

Extended Price Matrix Setup

Setup involves the following steps:

Step 1: Enabling the Extended Pricing Matrix Feature

Select Microsoft Dynamics GP > Tools > Setup > Service Management > Invoice Setup > Invoice Options.
Mark the Use Extended Pricing by Cost Code (Non-Labor) checkbox.
Select the method of determining Defaults for Price Matrix and Labor Rate Groups:
- Bill To (default): The pricing matrix and labor rate group default from the pricing matrix and labor rate group on the Bill To location record.
- Location: The pricing matrix and labor rate group default from the pricing matrix and labor rate group on the service call Location record.
Select OK to save your settings.

Defaulting the Price Matrix and Labor Rate Group

You have the option to select whether the price matrix and labor rate group will populate on a new service call from the service call Location record or the Bill To Location record.
For example, if a customer has two different locations (location A and location B) where work is performed, but only one billing address (location B), the Defaults for Price Matrix and Labor Rate Groups setup option allows you to create the following scenarios:

Option 1: Bill To (default)
- The price matrix and labor rate group for a new service call are pulled from the Bill To Location.
- A service call performed at location A and billed to location B will use the price matrix and labor rate group from location B (the Bill To location).>A service call performed at location B and billed to location B will use the price matrix and labor rate group from location B (the Bill To location).
Option 2: Location
- The price matrix and labor rate group for a new service call are pulled from the Location of the service call.
- A service call performed at location A and billed to location B will use the price matrix and labor rate group from location A (the service call location).
- A service call performed at location B and billed to location B will use the price matrix and labor rate group from location B (the service call location).
- By default, the Defaults for Price Matrix and Labor Rate Groups option is set to Bill To (default). When you change the method of defaulting the price matrix/labor rate group, new service calls will be created using the new method, but the price matrix/labor rate group used on existing service calls will not change. The price matrix/labor rate group on an existing service call can be edited manually.

Step 2: Setting up Sub-Cost Codes for Other Costs (Optional)

Sub cost codes allow you to assign sub cost category accounts for other costs. An example would be a trip charge that you may charge that is separate from the actual work being done. This allows you to track other costs and a lower level through GL accounts. Sub cost codes apply only to cost code 5 (usually labeled as Other). Each sub cost code will have its own tax schedule and own set of GL accounts for posting.

Set up Sub Cost Codes

Select Microsoft Dynamics GP > Tools > Setup > Service Management > Invoice Setup > Other Costs. The Other Costs Setup window opens.
Enter a Description for a sub cost code. Select Save. Repeat this step for all sub cost codes you are adding.

Assign GL Accounts to Sub Cost Codes

Select Tools > Setup > Service Management > Invoice Setup > Invoice Accounts > Other Costs button.
Use the Default button to automatically fill an account field with the same account used for the main Other cost code. If you are using the same accounts, this button helps to speed up data entry.
Use the lookups to assign debit and credit accounts for each sub cost code.
When you are finished, select OK. You cannot leave this window until all sub cost codes have been assigned accounts.

Assign Tax Schedule IDs to Sub Cost Codes

Select Tools > Setup > Service Management > Invoice Setup > Master Tax Schedule Setup. The Service Management Master Tax Schedule Setup opens.
Select a master tax schedule ID.
Select the Other Costs Setup button. The Other Cost Master Tax Setup window opens.
Select an Other Costs Sub-Cost Code.
Select a Tax Schedule ID.

If you are using third-party tax software, the Exclude From Tax Calculation checkbox has no effect.
Select Save. The master tax setup is saved and displays in the list at the bottom of the window.

Step 3: Setting up Extended Price Matrices for Markup on Costs

Extended price matrices allow you to define all pricing markup for non-labor charges, by cost code element. You can filter criteria by various elements of a service call, such as problem type, service call type, equipment type, and so on. Each element is a field that can be either required or not required. You can set up multiple price matrices, based on a combination of elements.
First, you must define which elements will be required for which price matrix/cost code combinations.

Specify Required Fields for Entering Price Matrices

Fields you select will become required data entry any time someone enters a price matrix for that price matrix/cost code combination. You can include the following fields as required:

Call Type
Problem Type
Equipment Type
Manufacturer ID
Model Number
User-defined fields, as applicable

Billing Method is always required.

Select Tools > Setup > Service Management > Invoice Setup > Extended Pricing Matrix.
Enter a Pricing Matrix ID and Pricing Description.
Select the expansion button attached to the Pricing Matrix field to open the Extended Pricing Matrix Setup window.
Select a Cost Code, and if applicable, a Sub Cost Code. The Sub Cost Code field is enabled only if the Cost Code is 5.
In the lower portion of the window, select which fields you want to specify as required for this price matrix. To do so, mark the Required checkbox next to the appropriate field item. The item(s) you mark as required will appear as drop-down fields in the Extended Pricing Matrix window, where you will enter pricing information. To change the order that an item will appear in the Extended Pricing Matrix window, highlight the item and select either the up arrow or down arrow button to move the item up or down.
Select OK. The window closes and you will return to the Extended Pricing Matrix window.
Repeat steps 2 through 6 above for each price matrix/cost code combination. You must Clear the Extended Pricing Matrix window so that you can enter a new price matrix "before" repeating the steps above.

When you are finished specifying filter criteria fields, continue with Step 2 below to enter pricing markup information, including the specific values for the criteria fields you have marked as required.

Enter Price Matrix Markup Cost Information

In the Extended Pricing Matrix window, select a Pricing Matrix ID and Cost Code.
Make selections in the criteria fields, noting that those that include an asterisk * are required.
Select a Billing Method. The fields that appear depend on which billing method you selected.
1. If you select: Markup on Total Cost by Percent, Markup on Unit Cost by Amount, OR Markup on Unit Cost by Percent
  Then: A list view appears, where you can enter a Markup percentage, Starting Cost, and Ending Cost. Select Add to enable these fields.
  
  When you are finished with the first row, if you want to enter another cost range, press Tab. The cursor moves to the next row, where you can enter another markup percentage for the next price range. As rows are added, the price matrix hierarchy tree on the left is updated.
  
  For subsequent rows, the Starting Cost is always the ending cost from the previous row, plus one penny (.01). So if the ending cost from the previous row is $2,000.00, the starting cost for the next row fills with $2,000.01. The Ending Cost always fills with 99,999,999,999,999.99; you can adjust amounts to fit your own price range criteria.
2. If you select: Fixed Unit Price
  Then: Enter a Unit Price. Select Add. The price matrix hierarchy tree on the left is updated.
3. If you select: Fixed Service Call Amount
  Then: Enter a Billing Amount and Item Description. Select Add. The price matrix hierarchy tree on the left is updated.
Continue to add other price matrix combinations. Choosing Save clears the window, which allows you to add an entirely new price matrix with different criteria.

Working with the Tree View Hierarchy

To collapse and expand the price matrix tree:

Use the collapse or expand buttons, as shown below.

To remove elements in a price matrix tree:

When you remove elements (nodes) in a price matrix tree, all child elements are removed along with the parent.

Expand the price matrix tree to view the elements you want to remove.
Select an element and select Remove.

To copy price matrices:

In the Extended Pricing Matrix window, select Copy. The Extended Pricing Matrix Copy window opens.

Select a Copy From price matrix name and a Copy To price matrix name. Enter a Pricing Description for the Copy To price matrix.
Select Copy.
Select OK to the Copy completed successfully message.

Step 4: Setting up Billable Overhead

To account for miscellaneous service expenses like shop supplies, fees, and non-inventoried items such as nuts and bolts, you may select to set up a "billable overhead" charge, to be added automatically to your service invoices. This charge is calculated as a percentage of the total cost or billing amount for a cost category, with set minimum and maximum amounts. Setting up this automatic charge is useful in helping to eliminate user error, as it assures that billable overhead is being applied on a consistent basis.
You can set up multiple charges in your pricing matrices, which are then assigned to customer locations; this allows you to not only associate different charges with different customers but also assign a different charge to each location.

Setting up an Automatic Billable Overhead Charge

The parameters for automatically adding billable overhead to an invoice are set up on the Extended Pricing Matrix window. Similar to the way you use a pricing matrix to create markups for non-labor charges, you use this window to define when and how billable overhead is applied to a service call invoice.

You can apply billable overhead to both labor and non-labor cost categories.

Select Microsoft Dynamics GP > Tools > Setup > Service Management > Invoice Setup > Extended Pricing Matrix.
Select the Pricing Matrix that you wish to add the charge to, or enter a new name and description if you wish to create a new pricing matrix.
Select the Cost Code that the charge applies to. For example, if you select MATERIALS, the billable overhead charge will be a percentage of the cost or billing amount in the MATERIALS category. If you select OTHER/TRAVEL, select a Sub Cost Code as well.
In the Billing Method field, select whether you want billable overhead to be calculated as a percentage of costs or a percentage of the billing amount for the selected cost code.
Use the drop-down fields on the window to define billable overhead criteria. Service calls of which call type and problem type should include the extra charge? Or perhaps you want to set up billable overhead based on certain values in your user-defined fields. Only when a service call meets the criteria specified on this window will the charge be added to the service invoice. Billable overhead is calculated based on the following four criteria fields:
- Problem Type
- Service Call Type
- User-Defined 1
- The equipment-related fields Equipment Type, Manufacturer ID, and Model Number are disabled, as these are not criteria for determining when billable overhead is added.
  
  In addition, any of the four criteria fields that appear beneath these equipment fields will also be inactive.
  
  If you wish to change the order of these fields, use the expansion button next to the Pricing Matrix field to open the Extended Pricing Matrix Setup window.
Specify the overhead billing charge amount by entering the Percentage of the total billing/cost. In the Item Description field, enter the description that you want to show up on the invoice for this charge.
Specify a Minimum and Maximum billable overhead amount. If the charge that is calculated from the percentage is higher than zero but lower than the minimum value, the minimum value will be used. If the amount is higher than the maximum value, the maximum value will be used. If you want to charge a flat fee on any billing or cost amount greater than zero, regardless of the percentage, enter the flat fee amount as both the minimum and maximum value.
Select the cost code that you want to apply the charge to. If you select Other as the Apply to Cost Code, also select a Sub Cost Code. The charge will appear as a billable amount charged to this cost code.
Select Add to add the parameters for the billable overhead charge to this pricing matrix. You can continue to set up billable overhead charges for additional cost codes on this pricing matrix; however, you can only set up one charge per cost code.

Assigning the Charge to a Location

After setting up the billable overhead charge parameters, assign the pricing matrix to a customer location. When you create a service call for this location, if the service call meets the criteria specified for billable overhead on the selected pricing matrix, the billable overhead charge will be automatically added to the invoice.

Select Cards > Sales > Customer. Select a customer and then select the Location button OR Select Cards > Service Management > Service Manager. In the Service Manager window, select a customer and zoom on the Location Address ID field. The Location window opens.
In the Location window, select a Price Matrix.
Select Save.