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How To: Pay Vendor Benefits
1. Background
Certain mills, particularly in Western Canada, are paying their contractors a benefits rate (or perhaps a benefit for trucking versus logging) on a per tonne or per cubic meter basis, and the contractors must then administer the benefits program on behalf of their subcontractors. The contractors are generally required to show their subcontractors the benefits payments separate and apart from the base payments for the phases which that subcontractor performs.
The Logger's Edge has functionality that allows users to set up benefits rates that they will pay out to those subcontractors (vendors) that are eligible for benefits payments. When this feature is enabled, users set up their benefits pay rates in a special window (found under the Contracts | Benefit Rates menu item). The vendor pay calculators will then marry these rates up with the loads for which they are being paid, and will write the benefits amounts in miscellaneous payment entries. Specifically, the system will create one miscellaneous expense entry for each vendor/block/pay activity combination for which benefits payments are due. For example, if a loading vendor loads 50 loads in three different blocks where benefit rates are due, the system will create three miscellaneous entries that aggregate the benefits payments into amounts due for loads on Block 1, Block 2, and Block 3, respectively.
Notes:
a. This functionality will work with both regular pay periods and customer pay periods.
b. This functionality will ONLY work for blocks where the user tracks activities (and corresponding equipment) directly on the load slip. Benefits are paid to the owner of the equipment on the load slip (or the owner of the truck for trucking).
2. Setup Steps InvolvedSet Up a Special Account Code for Tracking Miscellaneous Benefits Entries
Under Setup | Accounting | Account Codes, set up a specific account code that you want used on all the miscellaneous expense entries that automatically get created by the Vendor Calculators when this functionality is enabled. The account code you set up should be only used for benefits records that are created automatically by the software --- it should not be used for any other miscellaneous expenses.
It is critical that
the account code selected in the Basic Setup window be set up specifically for
Benefits and that it NOT be used for any other purpose than to track the
benefits records that the system will automatically create when the Benefits
feature is enabled. The reason is that when the calculators are run, the
system will delete all benefits associated with this account code in selected
pay period.
Set 'Enable Benefits Rate' Flag in Basic Setup
In the Basic Setup Window, the flag that enables benefits (on the Oddball tab) needs to be turned on, and the proper account code set up specifically to identify system-created miscellaneous benefits must be selected.
This action can only be performed by someone logged in as an administrator.
Enable 'IS-BENEFIT_ELIGIBLE' Field on the OWNERS Table
You must stop and restart the program after you make these two setting changes in order for them to take effect.
Identify Vendors That Are Eligible For Benefits
Set up Benefits Rates
With the 'Enable Benefits' flag turned on, there is a menu item 'Benefit Rates' under the Contract menu item that is turned on.
This menu item brings up a window that allows you to set up the relevant benefits rates.
Use this entry window for benefits rates rather than setting up setting up rates in a separate pay contract.
There are some important rules to note about this rate setup grid.
1. Use of NONE in the grid would be interpreted as “regardless of the value of the item in the column.” It will be permitted for block and destination, but NOT for activity. Activity must be entered explicitly.
2. The “trumping" order for the matching when NONE is used works as
follows: Match on block, then destination, then route. So, specific match
on block when destination = NONE will “trump” (that is, will be interpreted as a
better match than] a specific match on destination when block = NONE.
Run Full Vendor Calculators
There is now a routine that runs during the vendor calculation process that generates "aggregate" miscellaneous entries reflecting the benefits payments that are due. Specifically, the system will attempt to generate one or more miscellaneous expenses entry for each vendor that is eligible for benefits payments. If the vendor has benefits for only one block and one pay activity, then only one miscellaneous entry will be created for that vendor for that pay period.
The miscellaneous entry will be stamped with a date equal to the ending date of the pay period, and a block corresponding to the block for which the benefits were calculated. If the vendor worked on multiple blocks and/or performed multiple phases, then a distinct miscellaneous entry will be created for that vendor for each block/activity combination for which he was paid in that pay period.
The miscellaneous entries will also be stamped with a revenue contract called "REV-BENEFITS' which is automatically added to the database when the benefits feature is enabled.
The pay calculators
do not do any error-checking to flag off to you if you have failed to set up
benefits rates to match certain loads. It is incumbent upon the user to
ensure that all benefit rates have been set up properly.
The miscellaneous
benefit amounts are created only during the Full vendor calculator. The
incremental vendor calculator will not perform any benefit calculations
whatsoever, nor will the "Recalc Pay" button on the load slip. The reason
is that the benefits amounts are not calculated by the system on a load-by-load
basis, but for a group of loads at a time (ones sharing the same
block-vendor-pay activity for a given pay period). It is therefore
particularly important that you issue your statements only after a clean run of
the Full calculator.
Review the Miscellaneous Entries Created by the Pay Calculators
The miscellaneous entries will be stamped with the proper activity as well.
These miscellaneous entries will automatically appear on the contractor's vendor statement in the miscellaneous entry section.
If you re-run the full vendor pay calculator, the system will automatically delete the miscellaneous benefit entries for that pay period and recalculate them, accounting for any edits you may have made to the benefits rates or load tickets themselves.
You should not edit
these entries that have been automatically created by the pay calculators, but
you can still add your own miscellaneous entries into this window to account for
other miscellaneous reimbursements to the vendor (subcontractor).
Review the Miscellaneous Entries On the Vendor Statements
Check the statement for each vendor who is eligible for benefits (under Reports | Vendor Statements) to ensure you see the entries you expect to see. The summary page of the vendor statement will show one overall amount for all miscellaneous expenses, but there will be a detailed page listing out each of the miscellaneous entries that the system created for benefits.
Note: If you run the calculators, and then realize that you need to shrink the pay period you just calculated, you should be aware of the following: the statement details relating to the miscellaneous entries will be removed from the statements at the time you shrink the date range of the pay period. The miscellaneous entries themselves, however, are still tagged with the original pay period ending date. They will not be cleaned out until you re-run the calculators. If you find yourself in a situation where you have to shrink a pay period date range, you should double-check your miscellaneous entry grid after running the calculators to ensure that only the desired entries remain in the miscellaneous grid.
Review the Detailed Benefits Reports to Verify the Aggregate Miscellaneous Entry Amounts
The Reporting Tool contains two reports showing the detail behind the aggregated miscellaneous entries, one for equipment, and one for trucks. If you need to provide a vendor with the detail, or you want to validate the system's calculations, you can run these reports for the relevant pay periods. These reports will show the benefits calculations on a load-by-load basis.
1. Equipment Benefits Report (Report #507, located under the Equipment menu item in the Reporting Tool)
Note: In order for a load’s tonnage to appear in this report, the load must have a piece of equipment entered in the load slip activities window for the activity to which benefits apply. The reason is that the activity indicated for each rate in the matrix will be compared against the activities associated with the pieces of equipment on the load slip. If the activity, block, and destination in this grid match a load, that load will be included in the Benefits report (assuming the equipment owner is eligible for benefits). Otherwise, the load will not be included in this report.
2. Truck Benefits Report (Report #612, located under the Equipment menu item in the Reporting Tool)
To see a report
showing all benefits paid out in a given date range across all vendors and
blocks, you can run the report under the "Contracts" menu item called Summary
P&L for the "REV-BENEFITS" revenue contract. It will show all
miscellaneous expenditures assigned to this revenue contract for the given date
range. (It will not, however, show revenue you receive for benefits -- the
revenue will appear under the revenue contract you've set up to handle benefit
revenue.)
