How to Examine Flat Fee Arrangements and Billed Slip Values in Sage Timeslips

By Elaine Marmel

When you use any flat fee arrangement and approve a bill, Sage Timeslips calculates each slip’s billed slip value by prorating the effects of the billing arrangement across all slips that appear on the flat fee bill. To determine the billed slip value, Timeslips

  • Calculates the Billing Arrangement Difference amount

  • Calculates the percentage of the Billing Arrangement Difference to assign to each slip

  • Calculates the prorated amount of the Billing Arrangement Difference for each slip

  • Adds the prorated amount to each slip

For progress or interim bills or any flat fee arrangement that uses a duration of job or applies the flat fee to a number of bills, the proration works the same way. However, Timeslips doesn’t assign billed slip values until you change the status of the billing arrangement to final bill, generate the bill, and approve it.

How to calculate the billing arrangement difference in Sage Timeslips

Suppose you have two slips — Slips 1 and 2 — with individual original slip values of $600 and $200, respectively. In addition, these slips do not contain markups/markdowns or adjustments. If you billed using the slip-based billing arrangement, you’d charge the client the total original slip value — $800 — and each slip’s billed value would equal its original value.

But suppose you use an absolute flat fee arrangement and bill the client $1200. In that case, when you approve a bill, Timeslips begins the process of calculating each slip’s billed slip value. Timeslips starts by calculating the billing arrangement difference amount by using the following formula:

Flat Fee Amount – Total Original Slip Values = Billing Arrangement Difference

In this example, the billing arrangement difference amount would be $400, which is the flat fee amount of $1200 minus the total original slip values of $800.

How to calculate the percentage to assign to slips in Sage Timeslips

Next, Timeslips needs to prorate the billing arrangement difference amount of $400 to each slip covered by the billing arrangement — Slips 1 and 2 in this example. To calculate the percentage of the billing arrangement difference amount to assign to each slip, Timeslips uses this formula:

Individual Original Slip Value / Total Original Slip Values = % of Total Billed Slips

For the two slips in this example, the math looks like this:

Slip 1: $600/$800=.75 (75%)

Slip 2: $200/$800=.25 (25%)

How to calculate the prorated amount for each slip in Sage Timeslips

Timeslips calculates the prorated amount of the billing arrangement difference amount by using the following formula:

% of Total Billed Slips * Billing Arrangement Difference = Prorated Amount

For the two slips in this example, the math looks like this:

Slip 1: .75 * $400 = $300

Slip 2: .25 * $400 = $100

How to determine the billed slip value in Sage Timeslips

Finally, Timeslips adds the prorated portion of the billing arrangement difference amount to the original slip value to determine the slip’s billed value by using the formula:

Original Slip Value + Prorated Amount = Billed Slip Value

In this example, the math looks like this:

Slip 1: $300 + $600 = $900

Slip 2: $100 + $200 = $300

Note that the total of the billed slip values that Timeslips assigns to the slips covered by the flat fee arrangement ($1200) equals the amount of the flat fee ($1200).

In this example, each slip’s billed slip value is greater than its original value because the flat fee amount is higher than the total original slip values.

The converse is also true. If the flat fee amount were lower than the total original slip values, the billing arrangement difference would be a negative number, and Timeslips would assign a billed slip value that would be lower than each slip’s original value.

You can view the billed value for any slip by clicking the Value field in the upper-right corner of the Slip Entry window to display the Slip Values dialog box.

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Until you approve the final bill for progress or interim bills or any flat fee arrangement that uses a duration of job or applies the flat fee to a number of bills, the slip’s billed value indicates that it hasn’t yet reached its final billed value.