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Simplify Rate Setup with Rates as a Percent of Another Rate

2019-01-05 22:27:01
It's somewhat common, especially in Canada, for contractors to receive revenue from a mill where the rate is based on a percentage of another rate that you've already set up. It typically happens when a fuel adjustment is calculated as a percentage of the base rate.

In the U.S., a somewhat common scenario on the payment side is that you may want to pay a forester a percentage of the stumpage rate you pay the landowner. The Logger's Edge now lets you handle both of those scenarios. This post will explore the Canadian scenario, and our next post will explore the U.S. scenario.

Suppose the mill - let's say West Fraser - pays a contractor a logging base rate, and a logging fuel adjustment rate that is a percentage of the base rate. They do the same for trucking. That percentage typically varies from one month to the next, but the percentage itself is typically the same across most if not all blocks, regardless of the base rate itself. Even though the mill may not display it on their pay statement as a percentage of the base rate, but rather as a rate per m3 or per tonne, the underlying calculation is typically a percentage of the base M3 (or tonne-hr) rate. The ability to set up revenue rates as a percentage of another revenue rate can really help simplify the rate management, especially if used in conjunction with our rate sheet feature, which we explored in our prior post.

Why? Imagine you have 5 blocks on the go in a given pay period and the tonne-hour rate is the same across those blocks. If the fuel adjustment changes monthly, then each month, you must go into five different blocks, and enter a new rate per tonne for the fuel adjustment for each block-destination combination. What a pain! BUT, if the new rates are all equal to, say 2.5 percent of the the base tonne-hour rate, then you can get away with entering only one new rate per month in one place in the software (in a trucking fuel adjustment rate sheet) with the new fuel adjustment percentage and the new effective date. Assuming you make use of revenue "rate sheets" in conjunction with the new "revenue as a percentage of another rate" feature introduced in 2018, your rate setup would look something like this:



If you are interested in exploring this feature, contact one of our reindeer for assistance at support@caribousoftware.com. It can really simplify your rate management process!

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