Block Hour contracts are prepaid contracts, where the service provider sells a certain number of work hours to their customer, either on a regular schedule such as a number of hours for a set price monthly, or as a one-time purchase. For more information on creating block hour contracts, refer to Creating a contract.
As the service provider performs work for the customer, the block of hours is debited by hours worked, until it reaches zero hours remaining. A block is debited when the labor item is approved and posted. For more information on the Approve and Post process, refer to Approving and posting billing items.
Requirements for a block to be available to be used
In order for a block to be consumable, the following must be true:
- The block must be active. Refer to Editing block, retainer, or ticket purchases.
- Worked Date on the time entry must be within the start and end dates of the block. That is, the worked date must be greater than or equal to the block start date, and less than or equal to the block end date.
Order in which blocks are consumed
Blocks are consumed in order by the start date on the block. If there are multiple blocks with the same start date, any one of them may be debited first.
Order in which time entries are applied to a block
Once labor is posted, it is applied to the block in order by worked date on the time entry. For time entries with the same worked date, any project task time entries without a start time (those using decimal time, refer to About Project Time and Start Stop Time) are applied first. Then the remaining time entries are applied in order by the start time on the time entry.
What factors impact how many hours are consumed for a time entry?
Generally speaking, one hour of labor will consume one hour of block time. However, you can configure block hour multipliers that are based on the time entry’s role, which will deduct more or less time per hour from a block hour contract. Refer to Add or edit roles.
EXAMPLE For example, the user can configure a 2.00x block hour multiplier for a Senior Database Administrator role, and a .50x block hour multiplier for an Intern role. Then, when a Senior Database Administrator works 1 hour, the block of hours is debited 2 hours and when an Intern works 1 hour, the block is debited .5 hours.
What happens when you run out of block time?
Users can turn on overage billing for Block Hour Contracts. The Overage setting specifies how the customer is to be billed for work entries that are not covered by a block of purchased hours (due to an insufficient balance of hours or to the non-availability of a block).
- When Overage Billing is enabled, all hours that are not covered by a block hour purchase will be billed at the overage billing rate as specified on the contract. Refer to Overage Billing Rate.
- When Overage Billing is not enabled, all hours that are not covered by a block hour purchase will be billed at the role rate. If a role rate is specified at the contract-level for the role at which the work was performed, the hours will bill at the contract-level role rate. If a role rate is not specified at the contract-level, the hours will bill at the Admin role rate. Refer to Rates and Multipliers.
