Rate model vs labor rate card

[Sweety5]

Hello All ,

Can any one tell me exact difference between labor rate card and rate model , and when we can use them means at what condition?

Which one is the best practice?

And also tell me the attributes of labor rate card and rate model in servicenow.

I see the doc but i dont get much information on this.

Pls Explain me.

Thanks in Advance !!

[Vishal Savajia1]

Hi 

Rate Model is much more generic workflow in  PPM Module for Projects and Demands while Labor Rate Card is specific to labor's Hourly rate. 

ITBM | Rate Model - YouTube

We can use rate model to derive date-effective, criteria-driven hourly rates for calculating planned and actual resource costs for a project or demand.

A rate model consists of one or more rate lines. Each line contains a unique combination of criteria values and the hourly rate of a resource. You define the criteria by adding up to 10 attributes from the following entities:

• Project
• Project task
• Demand
• User
• Group
• Role
• Resource plan

Unlike labor rates, which are based on the user attribute only, a rate model can derive hourly rates based on up to ten attributes. These attributes can be selected from predefined entities such as projects, demands, users, and roles.

In Cost Management, task rate cards and labor rate cards capture operating costs by generating expense lines representing the cost of performing a task

• Task rate cards are templates used to define the type of task and the method of calculating the associated costs.
• Labor rate cards are templates used to define worker's labor rates when calculating task cost based on time worked.

[Rae Ann Prasnic]

You may find this Resource Plan Cost Calculations article helpful. 

Rae Ann

[melaniegilbert]

The labor rate is great to use for things like field service techs or a standard labor rate. The Rate Model is designed more for calculating the planned and actual cost of resources, using resource plans and time sheets (which become expense lines). 

ServiceNow allows you to use both the labor rate and rate model, and has an order of operations. 

https://docs.servicenow.com/bundle/orlando-it-business-management/page/product/resource-management/task/t_CreateResourcePlanProjectTask.html

Based on the same time cards used for the Actual hours, the actual cost is calculated using the hourly rate of each user and the hours worked. Used to inform resource requesters and resource managers of actual costs based on the actual hours that user resources added on their approved time cards.

The hourly rate is derived as:

• If the Rate override option is selected, the hourly rate specified in the Resource rate field is used.
• If a rate model is populated on the project or demand to which the resource plan is associated, the hourly rate is derived from the rate model.
• If the time sheet policy of a user is set for multiple rate types, the actual cost is determined using the labor rate card with the default rate type.
• If the default rate type is inactive, the system rate is used to determine the actual cost.
• If the time sheet policy of a user is set for multiple rate types, the actual cost is determined using the labor rate card with no rate type. Otherwise, the system rate is used.

This diagram has been the most useful for me when I implemented a rate model for the PMO, and there are different billable rates per cost center: 

https://docs.servicenow.com/bundle/orlando-it-business-management/page/product/project-portfolio-suite-with-financials/concept/rate-model.html

In my case, I had the rate lines within the rate model look for:

- is this user active?

- is this user in a group that is listed in a rate line, then apply $xxx.xx hourly rate 

- if this user has a cost center = xxx, the apply $xxs.xx hourly rate

I had to do the rate lines with a condition that looked for the user's group cost center (planned cost) and also for the user's cost center - that way both planned costs on resource plans and actual costs on time cards/expense lines were calculated.

Here is a diagram on how these tables and the logic/scripts between them work:

https://docs.servicenow.com/bundle/quebec-it-business-management/page/product/project-management/concept/c_ProjectManagementCostingAddOn.html