Billing Settings

On the Configure Billing Settings screen, you must determine your 1443 posting methods. The Delivery Invoices at Net Amount check box controls the 1443 delivery invoice posting method, Gross or Net. With progress payments, you can submit interim bills to recover a percentage of your incurred costs, even if deliveries have not been made. When you ship a finished good to the customer, the bill is a "Delivery" invoice. This invoice will show the value of the shipment, but you must reduce, or "liquidate," an amount for the progress bills that have already been paid. Therefore, the invoice amount that will be paid is always the net amount.

If you select the Delivery Invoices at Net Amount check box, the general ledger and accounts receivable reports will be posted with the net amount. This means a receivable will be created for the net amount and the liability reduced for the liquidation amount when the bill is posted. When the customer pays the bill, the cash receipt will credit the receivable for the net amount.

If you do not select this check box, the general ledger and accounts receivable reports will be posted with the gross amount. This means a receivable will be created for the gross amount of the shipment. When the customer pays the bill, the cash receipt will credit the receivable for the gross amount and reduce the liability by the liquidation amount. In this scenario, an additional line will be automatically created on the Manage Cash Receipts screen to record the liquidation entry.

In summary, this check box controls the presentation of billed accounts receivable and liquidated progress payments for delivery invoices that have not been paid. Using the net method, the liability reduction is recognized when the bill is posted. Under the gross method, the liability reduction is recognized when the cash is received.

Examples of Net versus Gross Method for Posting Delivery Invoices:

On the Configure Billing Settings screen, the Progress Bills to GL When Billed check box controls the 1443 Progress Payment invoice posting method. Progress payment bills are interim bills that allow you to recover a percentage of your incurred costs, even if deliveries have not been made. As such, these bills generate a receivable for the amount of the bill, but also a liability, because you are billing for amounts that have not been delivered. This check box provides two options for presenting the progress payment bills on your financial statements.

Select this check box to treat progress payment bills similar to non-progress payment bills. When you post the bill, not only are the accounts receivable and project billing history files updated but also the general ledger files. The "A/R Progress" account is debited and, instead of using "Unbilled A/R" as the other side of the entry, the "Unliquidated Progress" account is credited to create the liability. When you pay the bill, cash is debited and the "A/R Progress" account is credited. If you use this method, your financial statements will show an A/R progress receivable balance for any unpaid progress payment bills. It will also show the unliquidated liability when the bill is posted.

If you do not select the Progress Bills to GL When Billed check box, the accounts receivable and project billing history files are still updated when you post the bill, but no entry is made to the general ledger and, thus, outstanding accounts receivable are not shown on your financials. When you pay the bill and post the cash receipt, the entry debits cash and credits the "Unliquidated Progress" account. Therefore, the "A/R Progress" account is not used at all, and the liability is not shown on your financial statements until you post the cash receipt. You can suppress progress payment bills when printing the Accounts Receivable Aging Report. This will enable you to reconcile the aging report to the general ledger if you do not select this check box

Examples:

Maintain Billing Accounts

On the Maintain Billing Accounts screen, enter accounts that will be subject to cash basis billing and/or subcontractor progress payments on a company-wide basis. If your projects require that purchases be paid for before they can be billed, set up the accounts to which this restriction applies in this screen. Note that cash basis is applied only to transactions from Costpoint Accounts Payable. This screen controls the cash basis billing accounts on a company-wide basis. The option for controlling a specific project's cash basis billing status is located on the Manage Project Billing Information screen. If a project has specific accounts that are subject to cash basis billing, in addition to the company-wide accounts, you can enter those accounts on the Cash Basis Information subtask of the Manage Project Billing Information screen. In summary, the system checks to see whether the project is subject to cash basis billing. If the project uses cash basis billing, the system checks the company-wide accounts first. Next, it checks the project-specific accounts for any additions. You cannot enter the same account in both the company-wide and the project-specific screens. This will cause a message to appear, and you will be forced to delete the duplicate accounts from the project-specific screen.

If you designate an account in this screen as a subcontractor account, the account will be included on the Update Subcontractor Progress Payments process. There is a requirement to segregate subcontractors for 1443s because they are not subject to progress payment percentages. The subcontractor amounts, when entered into the system through Costpoint Accounts Payable, will already have the appropriate percentage retained. Therefore, subcontractor costs are not integrated with other project costs. Accounts designated a 1443 subcontractor should be used exclusively for that purpose. In other words, subcontractor costs for 1443s should not be charged to non-designated accounts, nor should non-subcontractor costs be charged to subcontractor-designated accounts. The account designation for subcontractors is available on a company-wide basis only.

Remittance Addresses, Govt. Payment Offices, Contractor Addresses

Three addresses are required on the 1443: contracting office, paying office, and remittance address. You need to set up these addresses on the Manage Contractor Addresses, Manage Government Contract Information, and Manage Remittance Addresses screens, respectively. When you initialize the Manage Project Billing Information screen for the project, you can reference these addresses.

Generic Billing Formats, Supporting Schedule Formats

You do not need to set up generic bill formats or supporting schedule formats because the 1443 is a standard government form with no supporting schedules required. You can view information on specific billing lines in the Line Detail subtasks of the Manage Progress Payment Bills and Manage Closed Progress Billing Detail screens.

Project Billing Info

On the Manage Project Billing Information screen, the formula must be Progress Payment from the inception of the bill (that is, the formula cannot bill using a Cost Plus Fee On Cost formula and then be changed to Progress Payment, or vice-versa).

There is no retainage on 1443s.

In the Controls group box of the Project Billing Information screen, all options work the same for 1443s as for other types of bills. The Remittance Address for the code entered prints in line 2 of the 1443. Complete the Customer Terms field only if you want Costpoint to calculate the Due Date. This date initially appears on the Manage Progress Payment Bills screen, where it can be edited. You can use the Bill Cost Incurred on Cash Basis check box to control whether this project is billed as a "large business" or "small business." If you want the bill computed using "large business" calculations, use cash basis billing and select this check box. If you want the bill computed using "small business" calculations, do not use cash basis billing and you do not select this check box. Note that this option is provided at the project level instead at the company-wide level. It is possible to have some projects that are being billed as "large business" while others are billed as "small business." For example, if your company graduated from a small business to a large with projects still in progress, new projects would be classified as "large business," while the older projects would still be "small business."

Complete the Customers subtask to assign the customer to the bill. You must designate an Address Code even though it is not used; the required addresses on the bill are derived from the Addresses section described previously. Complete the % of Project Responsibility field with 100%, as 1443s cannot be shared by more than one customer.

In the Format group box on the Manage Project Billing Information screen, select the Govt 1443 Billing Format option. Do not enter a Supporting Schedule Format code, because 1443s do not use supporting schedules.

Enter the bill number of your last invoice from your previous system in the Last Bill Number field on the Manage Project Billing Information screen. The right-most numeric value of the bill number is incremented by one, and becomes the value for line 8A, Progress Payment Request No., on the 1443 when progress payment bills are calculated. To use bill numbering, make sure that you selected the Enable Project Specific Bill Numbering check box on the Configure Billing Settings screen.

Do not complete the Detail Levels subtask of the Manage Project Billing Information screen because 1443s print only at the top level.

Use the 1443 Info subtask to control what is printed in the header of the bill and some of the calculated amount lines of the bill. Enter the progress payment and liquidation rates that print in lines 6A and 6B, respectively, of Section I of the bill. These rates are also used in the calculation of the progress payment and delivery invoices. Enter a valid payment office that will print in line 1 of Section I. Enter the initial award date of the contract. The year prints in line 7A and the month in 7B of Section I. If this project was classified as Work-In-Process or Common Inventory, and you have completed the Manage Cost of Goods Sold screen, the value entered in the Estimated Costs field defaults to the Estimate to Complete field of the 1443 Info subtask. You can override this value. This amount is used in Line 12B, Estimated Additional Cost to Complete, in Section II. In the Contract Info group box, enter a valid contractor address, which is the agency receiving the invoice, that prints in line 1 of Section I. Enter the name and title of the contractor representative that prints in the certification section in the footer of the form 1443. Select a price basis that prints in Line 5 of the form 1443 header. It is also used in calculating some of the amount lines of the bill. Selections available are Contract Cost, Contract Value, Funded Cost, Funded Value, and Other. The Contract and Funded Values are entered on the Manage Modifications screen. If you want to use an amount different from the Contract and Funded options, select Other and enter the amount in the field below. Enter any accounts that are subject to cash basis billing and are not already included as company-wide cash basis accounts on the Manage Billing Accounts screen.

If you want to restrict transactions on the 1443 to only those that occurred within the period of performance date range, select the Limit Transactions To Period of Performance check box on the Other Info subtask of the Manage Project Billing Information screen. Do not enter any text in the Bill Heading list box, as it does not print on the 1443.

Maintain Project iRAPT Information screen

If you plan to submit your Progress Payment bill to the DoD via iRAPT, you must initialize the Manage Project iRAPT Information screen. Set it up at the billing level of the project for which you would like to create a iRAPT FTP file.  You must also assign a CAGE Code to this project. (Set up the CAGE Codes on the Configure iRAPT Billing Settings screen.)  You can assign only one CAGE code to an invoice-level project. The DoDAACs you assigned to the CAGE code on the Configure iRAPT Billing Settings screen default in to the DODAACs group box at the bottom of the screen, but you can change them.  

If you are submitting an invoice to Mechanization of Contract Administration Services (MOCAS), select the MOCAS Pay System check box. A MOCAS file is built differently than a non-MOCAS file.  For example, sales tax and discounts cannot be billed to MOCAS, and quantities must be in whole numbers. If you select the MOCAS Pay System check box, be sure that the Payment Office entered is a MOCAS payment office.  

You must specify Progress Payment as the type of invoice you want to generate. The File Source must be Progress Payment Bills. The CLIN Mapping method is ignored for progress payment invoices.

You may also need to complete several fields in the Progress Payment subtask. This subtask is available only when you select the Progress Payment invoice type. If advanced payments against this contract were received or items were delivered, invoiced, and accepted, select the Deliver On Invoice check box. If you select this check box, you must have amounts in line 20a and 25 on the progress payment invoice from which a iRAPT file will be generated.

You also need to enter the Date of Financial Info. This is a mandatory field in the iRAPT file. Select the Certification check box to certify that the invoice was prepared in compliance with the contract, that it is correct.

You may also need to add a request number in the Previous Progress Payment Request Number field. The request number must begin with PPRB if you selected the FMS (Foreign Military Sales) check box. Otherwise, the request number must begin with PPRA.  If the request number is eight characters long, the eighth character must be a letter to designate a LOT contract.  Because of this, Costpoint cannot extrapolate a previous bill number. This is a required field in the iRAPT file.

If the codes entered in the ACRN/FMS Worksheet table are FMS codes, the FMS check box must be selected, indicating the code used is a Foreign Military Sales code. The code entered must be an accepted FMS code.

If your contract specifies that you must submit your progress payment by ACRN or FMS codes, you must enter rows in ACRN/FMS Worksheet table window. The Accounting Character Reference Number/Foreign Military Sales (ACRN/FMS) codes entered in the ACRN/FMS Worksheet table window must be unique and the total amount of all of the lines should equal the amount billed.

If you need to submit an attachment needs with the file, enter the file path and file name. The file path is not submitted in the file but is stored here to help you locate the submitted file. The file name is included in the iRAPT file. If the iRAPT file indicates that an invoice has an attachment, you must manually put the file on the FTP site for retrieval. You must submit the attachments before the FTP file. They are placed in the same FTP directory. If the iRAPT file fails for any reason, you must resubmit the attachment before submitting the file again.

Maintain Open Billing Detail

As with regular standard bills, enter any posted transactions from your previous system that have not been included on a 1443 on the Manage Open Billing Detail screen. If the project is classified as "large business," be sure you include the check information for any transactions that are subject to cash basis billing and have been partially or completely paid. Enter this information on the Cash Basis Information subtask. Do not set up any records for subcontractors in this screen; enter these transaction costs on the Manage Subcontractor Progress Payments screen.

Maintain Billing History

On the Manage Billing History screen, enter a summary record for each unique project, organization, account, and transaction type. This record should be the Inception-to-Date (ITD) amount from the latest 1443 for each project. The Line Type will always be COST. The system uses these amounts to calculate some of the billing lines, such as lines 9 and 10. You can enter each record individually if you want to see the detail here and on the Manage Closed Progress Billing Detail screen. Do not set up any records for subcontractors in this screen; enter these transaction costs on the Manage Subcontractor Progress Payments screen.

Maintain Project Bill Summary

On the Manage Project Bill Summary screen, you can enter either one row in which all prior posted bills are summarized, or you can enter each fiscal year, period, and subperiod for informational purposes. With either method, Costpoint uses the screen totals. Enter amounts in the Delivery Amount and Amount Billed columns only; retained amounts are not used by 1443s. Be sure that the amounts entered in the Amount Billed column include both the Progress and Delivery invoice types. Three different processes reference this screen: (1) it is used when the revenue formula is Equal To Billings Before Retainage, Equal To Billings After Retainage, or Equal To Deliveries;  (2) it is used in the Unbilled Receivables process to derive Inception-to-Date (ITD) billings; and  (3) it is used in the Cost of Goods Sold calculation when the formula uses either Billed Amounts or Delivery Amounts.

Maintain Closed Progress Billing Detail

On the Manage Closed Progress Billing Detail screen, you must enter at least one record per project, which is the latest invoice from your previous system. With progress payment billings, all calculations are ITD. If you want to enter additional invoices, they will serve only as historical references. When you post 1443s, Costpoint writes each invoice for each project to this file, so you will have a separate record for each invoice. Complete each of the billing lines as per your latest invoice. Notice that the billing lines coincide with the actual 1443 form. Complete the Section 1, Addresses, and Remit To subtasks for informational purposes only. If you want to enter the individual transactions that comprise some of the billing lines, highlight the appropriate line and use the Line Detail subtask. In general, this information is not used in the calculation process and is for informational purposes only; however, keep in mind that you should enter the detail information if the progress payment bills are subject to rate adjustment billings. The lines available for entering line detail are:

Line 9                   Paid Costs Eligible Under Progress Payment Clause

Line 10                 Incurred Costs Eligible Under Progress Payment Clause

Line Detail is also available for line 13, but this information results from the calculation process and is non-editable.

Maintain Subcontractor Progress Payments

On the Manage Subcontractor Progress Payments screen, enter a record for each unique project, account, organization, and vendor combination. This screen is the source for line 14, as well as the delivery invoices for line 10, of the 1443. Normally, the Update Subcontractor Progress Payments process updates this screen during your monthly billings process. You can execute the Update Subcontractor Progress Payments screen regardless of the status of the project ("large" or "small" business). When you execute this process, transactions that were identified as subcontractors are deleted from the Open Billing Detail file and moved to the Manage Subcontractor Progress Payments screen. The Manage Subcontractor Progress Payments screen then becomes the source for line 14 and the delivery invoices for line 9. Subcontractor transactions are separated from other transaction types because they appear on separate lines on the form 1443 and because they require special treatment in the calculation process. Subcontractors are governed by the same progress payment FAR clauses as your company. When subcontractors submit delivery invoices to your company, you can bill the entire amount, because the invoice was "netted" when it was entered into Costpoint. You initialize both progress and delivery subcontractor invoices in this screen.

For Invoice Types of "Progress Payment," you can summarize, into one row, all invoices where the Invoice Amount, Paid Amount, and Billed Amount fields are equal (that is, transactions that have been fully paid and billed). The calculation process uses ITD amounts, and transactions that have been fully paid and billed are not required on an individual transaction basis. For informational purposes, you can enter the individual transactions. If any transaction has not been fully paid or billed, you must enter it individually to allow Costpoint to update it. For progress payment types, Invoice Amount and Billed Amount columns are completed. The Delivery Value, Delivery Hours, and Liquidation Amount fields are always zero because progress payment invoices are not used for shipped finished goods and no liquidation occurs. Complete the Paid Amount column by entering the check information on the Payments subtask. During the normal monthly processing, the Manage Subcontractor Progress Payments process updates the Invoice Amount field with the invoice amount from the Manage Accounts Payable Vouchers or Manage Purchase Order Vouchers screens in Costpoint Accounts Payable. The Update Cash Basis Information screen updates the Payments subtask. There is no partial billing of subcontractor transactions; either the invoice is accepted or rejected in this screen, in the Accepted column. The Manage Subcontractor Progress Payments process always sets this column to Y. You can edit this field; only accepted subcontractor invoices are included on the 1443.

For "delivery" invoices, complete the Invoice Amount, Billed Amount, and Paid Amount fields the same as for the progress invoices. For "Delivery" subcontractor invoices, the Invoice Amount field contains the invoice amount from the Manage Accounts Payable Vouchers screen or the Manage Purchase Order Vouchers screen; however, because subcontractors are also subject to the rules of Progress Payments, this invoice amount has already been reduced by the liquidation amount before entering the voucher.

When your company receives a delivery invoice from a subcontractor, enter the net amount of the invoice, which represents the amount owed to the subcontractor, on the Manage Accounts Payable Vouchers or Manage Purchase Order Vouchers screens. Enter the delivery, or shipped, amount in the Delivery Value field in the Header Information subtask of the Manage Accounts Payable Vouchers or Manage Purchase Order Vouchers screens. The difference between the delivery amount and the invoice amount is the liquidation amount, which is liquidating the amount of progress payments the subcontractor has been paid. Therefore, the same method (billing full invoice amounts for progress payment bills and reducing delivery invoices by the liquidation amount) can also be used for subcontractor invoices.

For "delivery" subcontractor invoices, the Shipment Value field contains the amount of the Delivery Value field from the Header Information subtask of the Manage Accounts Payable Vouchers or Manage Purchase Order Vouchers screens. On the form 1443, the Shipment Value is the billable amount on line 9 or 10 for subcontractor delivery invoices. The Liquidation Amount field is the difference between the Shipment Value and Invoice Amount.

If you have hours-based pools and want to burden the subcontractor hours from a subcontractor delivery invoice, enter the Delivery Hours. The delivery hours will be burdened if the Invoice Type entered is D and the Delivery Value and Delivery Hours are entered along with the Paid Amount and the Accepted column is Y.

As with the Progress Payment invoices, the Paid Amount field contains the total of the Check Amount Applied column from the Payments subtask. The system obtains payment information from the vendor check history files.