Q. Our budgeted rates for vehicle and equipment unit prices are significantly lower than actual rates – should I bill our customer and if so, how?
A. If the unit rates are cost reimbursable and are merely provisional unit costs (as opposed to negotiated fixed unit rates) then like your indirect rates, you may adjust billings as soon as you are aware of the difference. You can either bill for the period’s underbilling and then adjust the unit billing rates upward or simply make the adjustment to reflect both projected costs going forward and the amount underbilled in the prior period.
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To discuss your needs, contact Bill Lennett, Principal, at 1-925-362-0712 or email him at
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