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Setting up a Revenue Contract: Wizard

The Revenue Contract Setup Wizard takes you through all the steps necessary to set up a revenue contract. 

In general, we recommend that you set up a revenue contract for each customer for whom you deliver.  For example, if you receive settlements from Weyerhaeuser, International Paper, and Georgia Pacific, you would have three revenue contracts.

Some users like to be even more specific, and set up a distinct revenue contract for each destination.  (So, if you deliver to two mills owned by the same company, you would have two revenue contracts, each belonging to the same customer.)  In that scenario, one revenue contract will likely cover multiple Blocks (assuming you deliver to the mill from multiple Blocks.)  Furthermore, any given Block might be associated with multiple revenue contracts if you are delivering to multiple customers (or mills) from the Block.

Step 1.    Introduction

 

Step 2.    Select Revenue Contract Type

The Logger's Edge Software asks you the 'Revenue Basis' for the contract you want to set up.

There are 4 basic types of revenue contracts you can set up.

1. Customer Self-Invoices (Revenue based on Load Slips).  This option allows you to receive revenue from load slips based on counts, weight, volume or distance.  For example, you may be paid by the Tonne, MBF, M3, etc.  (Only applies to Load Slips).  The Logger's Edge will generate pro-forma invoices to which you can compare your actual revenue received from your customers (mills).  This is the most common type of Revenue Contract for load-based revenue.
2. Calculate Revenue based on Load Slips.  This option allows you to receive revenue from load slips based on counts, weight, volume or distance.  For example, you may be paid by the Tonne, MBF, M3, etc.  (Only applies to Load Slips)  This option is the same as option 1, with the exception that your invoice will be sent to the customer for payment (the customer does not self-invoice).
3. Fixed Fee Contract.  Revenue is entered manually based on fixed terms.  Example: a mill agrees to pay you $20,000 for road maintenance in a certain area (regardless of the number of hours it takes you to do the work.)
4. Calculate Revenue Based on Hours/Production and Materials.  If you perform work where you are paid by the hour (not load slip) or by units of production (e.g., Miles of road or Day rate) you can set up a contract to cover your hourly time or production activity slips.  For example, if you build roads and are paid $125.00/Hr., you would select this option and enter your  time under employee or contractor time slips.  You can charge out either employee or contractor time and/or production activities.

When you select option D, you have two additional options:

1.    Use Employee Hours/Production and Charge Rates (does not include subcontractor workers)

2.    Use Equipment Hours/Production and Charge Rates (includes subcontractors)

These two selections allow you to distinguish your charges for operators versus equipment.  In this way you can charge out workers separately from your equipment.  If, however, your charges automatically include the operator, you could just check the second checkbox and set your rates to be a combined rate.

Step 3.    Select the Customer (Company) That Will Pay You

This step asks you to identify who pays you.  Select the mill (or other entity) that will be paying you in connection with this contract. 

In the screen above, we have selected Smurfit-Stone as the customer who will pay us for work performed.

If you click the 'Internal' contract Type,  you can set up an 'Internal' revenue contract.  Suppose, for example, you have mechanics that work on your equipment whose costs you cannot charge out to a customer.  You could set up an Internal Maintenance contract and charge the mechanic's time against that "revenue contract" (although no revenue is actually received).  This type of contract allows you to track my non-chargeable activities to any level of detail desired  -- you could have several internal contracts, for say Maintenance, Travel, Safety Meetings, etc.  (Alternatively, you could have one general administrative contract, and use the activity on the time slip to distinguish among various type of administrative work performed.)

 

Step 4.    Select the blocks Covered by the Revenue Contract

A given revenue contract can be used to generate revenue from multiple Blocks.  For example, you might work for a mill that has timber rights to many Blocks that you work.  In this case you can select one or more Blocks that will be covered by the contract.

 

In the window above, notice you can switch between showing all Blocks in the system or only those from the previously selected customer.  This selection can sometime help in limiting the list to only those Blocks that are possibly relevant.

Note that if your revenue contract already existed when you created a new Block, you could have made the association between the Block and the revenue contract during the Block setup.  In that case, you would see that your Blocks were already associated with the revenue contract in this window (if you were editing an already-existing revenue contract.)

Step 5.    Add Destination for the Contract (Only Available for Load-Based Contracts (Types A & B)

Revenue contracts cover deliveries from selected Blocks (Step 4) delivered to specific destinations (mills).  For example, you may have a Block where wood is delivered to multiple destinations for the same customer, in which case you could cover those deliveries with one contract.  Alternatively, you might have a Block with deliveries to two mills operated by different customers, each of which pay you for deliveries.  In this case you would have to set up two revenue contracts, one for each customer.  Each revenue contract would be associated to the specific destination related to that customer, but both would be associated with the same Block. 

 

Step 6.    Select the Start and End Date for the Contract

This step is used to identify the date range for the contract.  Loads or Hours or Production Activity entries will only be charged to a customer if their pay date falls within the date range for the revenue contract.

This window also allows you to determine whether taxes (such as GST) are applied (not relevant in US).

 

Step 7.  Set Up Revenue Rates

This screen is where the rubber meets the road.  Depending on which type of revenue contract you are setting up, the rate setup works differently.

1. Customer Self-Invoices (Revenue based on Load Slips).
2. Calculate Revenue based on Load Slips.
3. Fixed Fee Contract.
4. Calculate Revenue Based on Hours/Production and Materials.

Note that Step 8 is covered in the specific rate setup discussions listed above.

Step 9.  Name the Revenue Contract

This screen is where you provide a name (Code) for the revenue contract.  The name or code should be a short description by which you can easily recognize the contract.  The description entry is used to provide a longer, more explicit description of the contract.

(The "Hours Qualify for Overtime" checkmark affects whether you pay overtime to the employees whose time is charged against this revenue contract.  Regardless of whether you do or do not pay overtime, the employees' hours will still be charged out at the flat charge-out rate set up for that worker.  In other words, the rate you charge to a customer for work performed in connection with this contract is unaffected by whether or not you have to pay overtime to your worker, regardless of whether this box is checked or not.)

Step 10.  Finish

You MUST click on Finish to save your revenue contract information, otherwise your prior selections will be Lost -- This is NOT good.  If you click Cancel or otherwise exit the wizard without clicking Finish, none of your entries will be saved.  Up until this step, all changes are stored temporarily and are not saved until you click Finish.