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You can set the billing amount and markup costs for a service invoice based on criteria such as call type, problem type, equipment type, and so on, for non-labor charges. For example, for an emergency call, you might want the ability to charge a higher markup cost. In addition, you can also include a flat rate/fee with zero costs to the service invoice. 

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Setup involves the following steps:

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Step 1: Enabling the extended pricing matrix feature

1. Choose Microsoft Dynamics GP > Tools > Setup > Service Management > Invoice Setup > Invoice Options.

2. Mark the Use Extended Pricing by Cost Code (Non-Labor) checkbox.
3. Choose the method of determining Defaults for Price Matrix and Labor Rate Groups:
   • Bill To (default): The pricing matrix and labor rate group default from the pricing matrix and labor rate group on the Bill To location record.
   • Location: The pricing matrix and labor rate group default from the pricing matrix and labor rate group on the service call Location record.
4. Choose OK to save your settings.

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• Option 1: Bill To (default)
  • The price matrix and labor rate group for a new service call are pulled from the Bill To Location.
  • A service call performed at location A and billed to location B will use the price matrix and labor rate group from location B (the Bill To location).>A service call performed at location B and billed to location B will use the price matrix and labor rate group from location B (the Bill To location).
• Option 2: Location
  • The price matrix and labor rate group for a new service call are pulled from the Location of the service call.
  • A service call performed at location A and billed to location B will use the price matrix and labor rate group from location A (the service call location).
  • A service call performed at location B and billed to location B will use the price matrix and labor rate group from location B (the service call location).
  • By default, the Defaults for Price Matrix and Labor Rate Groups option is set to Bill To (default). When you change the method of defaulting the price matrix/labor rate group, new service calls will be created using the new method, but the price matrix/labor rate group used on existing service calls will not change. The price matrix/labor rate group on an existing service call can be edited manually.

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Step 2: Setting up sub-cost codes for other costs (optional)

Sub cost codes allow you to assign sub cost category accounts for other costs. An example would be a trip charge that you may charge that is separate from the actual work being done. This allows you to track other costs and a lower level through GL accounts. Sub cost codes apply only to cost code 5 (usually labeled as Other). Each sub cost code will have its own tax schedule and own set of GL accounts for posting.

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1. Choose Tools > Setup > Service Management > Invoice Setup > Master Tax Schedule Setup. The Service Management Master Tax Schedule Setup opens.

2. Select a master tax schedule ID.
3. Choose the Other Costs Setup button. The Other Cost Master Tax Setup window opens.
4. Select an Other Costs Sub-Cost Code.

5. Select a Tax Schedule ID. 

   Note
   If you are using third-party tax software, the Exclude From Tax Calculation checkbox has no effect.

6. Choose Save. The master tax setup is saved and displays in the list at the bottom of the window.

Step 3: Setting up extended price matrices for markup on costs

Extended price matrices allow you to define all pricing markup for non-labor charges, by cost code element. You can filter criteria by various elements of a service call, such as problem type, service call type, equipment type, and so on. Each element is a field that can be either required or not required. You can set up multiple price matrices, based on a combination of elements.
First, you must define which elements will be required for which price matrix/cost code combinations.

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1. Select a Copy From price matrix name and a Copy To price matrix name. Enter a Pricing Description for the Copy To price matrix.
2. Choose Copy.
3. Choose OK to the Copy completed successfully message.

Step 4: Setting up billable overhead 

To account for miscellaneous service expenses like shop supplies, fees, and non-inventoried items such as nuts and bolts, you may choose to set up a "billable overhead" charge, to be added automatically to your service invoices. This charge is calculated as a percentage of the total cost or billing amount for a cost category, with set minimum and maximum amounts. Setting up this automatic charge is useful in helping to eliminate user error, as it assures that billable overhead is being applied on a consistent basis.
You can set up multiple charges in your pricing matrices, which are then assigned to customer locations; this allows you to not only associate different charges with different customers, but also assign a different charge to each location.

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1. Choose Microsoft Dynamics GP > Tools > Setup > Service Management > Invoice Setup > Extended Pricing Matrix.
2. Select the Pricing Matrix that you wish to add the charge to, or enter a new name and description if you wish to create a new pricing matrix.
3. Select the Cost Code that the charge applies to. For example, if you choose MATERIALS, the billable overhead charge will be a percentage of the cost or billing amount in the MATERIALS category.If you choose OTHER/TRAVEL, select a Sub Cost Code as well.
4. In the Billing Method field, choose whether you want billable overhead to be calculated as a percentage of costs or a percentage of the billing amount for the selected cost code.
5. Use the drop-down fields on the window to define billable overhead criteria. Service calls of which call type and problem type should include the extra charge? Or perhaps you want to set up billable overhead based on certain values in your user-defined fields. Only when a service call meets the criteria specified on this window will the charge be added to the service invoice. Billable overhead is calculated based on the following four criteria fields:
   • Problem Type
   • Service Call Type
   • User-Defined 1

   • The equipment-related fields Equipment Type, Manufacturer ID, and Model Number are disabled, as these are not criteria for deter mining determining when billable overhead is added.
     
     In addition, any of the four criteria fields that appear beneath these equipment fields will also be inactive. 

     Note
     If you wish to change the order of these fields, use the expansion button next to the Pricing Matrix field to open the Extended Pricing Matrix Setup window.

6. Specify the overhead billing charge amount by entering the Percentage of the total billing/cost. In the Item Description field, enter the description that you want to show up on the invoice for this charge.
7. Specify a Minimum and Maximum billable overhead amount. If the charge that is calculated from the percentage is higher than zero but lower than the minimum value, the minimum value will be used. If the amount is higher than the maximum value, the maximum value will be used. If you want to charge a flat fee on any billing or cost amount greater than zero, regardless of the percentage, enter the flat fee amount as both the minimum and maximum value.
8. Select the cost code that you want to apply the charge to. If you select Other as the Apply to Cost Code, also choose a Sub Cost Code. The charge will appear as a billable amount charged to this cost code.
9. Choose Add to add the parameters for the billable overhead charge to this pricing matrix. You can continue to set up billable overhead charges for additional cost codes on this pricing matrix; however, you can only set up one charge per cost code.

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