Time to Money: Contracts

Autotask contracts describe a billing arrangement. They are not necessarily a legal agreement, as in the traditional sense of “contract”. With contracts, users can:

Contracts are Optional

When work is performed without a contract, the hourly billing rate will be either the Admin Role Rate (Time to Money: Roles) or the Work Type’s rate (Time to Money: Work Types). Items will be billable unless a non-billable work type is assigned. Labor will be billed to the customer after the work is performed (it is not pre-paid).

For some users, the non-contract process does not provide the flexibility they need or want in how they bill a customer and calculate charges. For these customers, Autotask provides six contract types.

The Six Contract Types

Each of the six contract types, as well as the no contract option, have a different affect how time is converted to money and how the customer is billed.

Time and materials contracts

Time and materials contracts bill similarly to No Contract work, except that users will have an option to change the role rate at the contract level.

EXAMPLE  For example, a user may charge Customer 1 the usual $100/hour role rate for a Database Technician, but charge Customer 2 a discounted rate, set at the contract level, of $95/hour for a Database Technician.

Labor covered under a time and materials contract will be billed to the customer after the work is performed (it is not pre-paid).

Recurring Service Contracts

Recurring service contracts are best suited for billing arrangements that do not directly bill for work performed, but rather bill at a regular frequency, regardless of the amount of work performed, for example, $100 per PC, per month, for unlimited service. Labor items for recurring service contracts will go through the Approve and Post process. Optionally, they can display on invoices (as specified by the labor column description on the invoice template), for example, if the user wants to show the customer the value of the covered services.

NOTE  Users also have the opportunity to charge a setup fee on a recurring service contract. This can be useful if there is a one-time fee charged at the beginning of the contract. Alternatively, users can bill for setup fees as a separate contract charge.

Fixed Price Contracts

Fixed Price Contracts allow the user to bill the customer a preset amount when predetermined milestones or achievements are reached, instead of billing directly for work performed. Labor items for fixed price contracts will appear in Approve and Post. Optionally, they can appear on invoices (as specified by the labor column description on the invoice template), for example, if the user wants to show the customer the labor covered by the contract.

Block Hour Contracts

Block Hour Contracts are a pre-paid contract, where the service provider sells a certain number of work hours to their customer. As the service provider performs work for the customer, the block of hours is debited, by hours worked, until it reaches 0 hours remaining. A block is debited when the labor item is approved and posted.

In order for a block to be consumable, all of the following must be true:

  • Block must be Active
  • Worked Date must be greater than or equal to the block start date, and less than or equal to the block end date
Overages

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, specified in the Block Hour Contract Wizard, or on the Edit Contract screen.
  • 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.
Block Hour Multipliers

Users can configure block hour “multipliers”, based on the time entry’s role, to deduct more or less per hour from a block hour contract.

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.

Retainer Contracts

Retainer Contracts are a pre-paid contract, where the service provider sells a certain dollar amount of labor to their customer. As the service provider performs work for the customer, the retainer purchase is debited, until it reaches $0.00 remaining. A retainer purchase is debited when the labor item is approved and posted.

All hours entered on a retainer purchase will be billed at the role rate. If a role rate is specified at the contract-level, 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.

In order for a retainer purchase to be consumable, all of the following must be true:

  • Retainer purchase must be Paid
  • Retainer purchase must be Active
  • Worked Date must be greater than or equal to the retainer purchase start date, and less than or equal to the retainer purchase end date

In addition to labor, ticket charges and project charges are also debited from retainer purchases; however, contract charges are not debited from retainer purchases.

NOTE  Why can't contract charges be debited from retainer purchases? Retainer purchases get billed to the customer as a contract charge. If Autotask debited contract charges from retainer purchases, the retainer purchase charge would deplete the retainer.

Per Ticket Contracts

Per Ticket Contracts are a pre-paid contract where the service provider charges a fixed fee, per ticket, for a set of tickets. A ticket covers one case or incident. The ticket is deducted from the purchased set of tickets when it is marked complete, but the deduction is based on the ticket create date.

In order for a per ticket purchase to be consumable, all of the following must be true:

  • Per ticket purchase must be Paid
  • Per ticket purchase must be Active
  • The ticket create date must be greater than or equal to the ticket purchase start date, and less than or equal to the end date

Like Block Hour and Retainer contracts, Notification Rules can be used to notify resources or automatically purchase a set of tickets when the contract reaches a certain threshold.

Overages

Per ticket contracts include a required overage per ticket rate. This is the flat rate applied if work is performed on a ticket associated with the contract when there are no purchased tickets available.

Parent/Sub-organization Contracts

Customer organizations can be configured as sub-organizations to another organization (the parent organization). The main (headquarters) organization would be set as the parent organization (ex: TechMart Corporate Offices). The parent organization can have an unlimited number of sub-organization organizations (ex: TechMart,Albany NY; TechMart, Cleveland, OH, etc.). A sub-organization can have only one parent organization.

When performing work for a child sub-organization, the user can select either a contract for that sub-organization, or select any of the parent organization’s contracts; but, when performing work for a parent organization, the user cannot select a sub-organization's contract. Other than that, the same rules specified in the Contract Type section still apply.