Calculation of Rental Usage Meters
In this document it is explained how rental meter information is stored in 'Meter. Display/Update History' (STS330) for usage meters and how allowed usage and over usage are calculated during rental invoicing.
If an item is set up for usage meter readings, the agreement line automatically gets an additional charge. There is also meter information connected to the line, with information of the meter readings, enabling you to charge the customer if the equipment is overused. You can also manually add a usage meter to an agreement line.
To report and calculate usage meter reading for an equipment, the item must be configured for usage meter reading. This is described in Connect Usage or Consumption Meters to a Rental Agreement Line.
Rental meter history
When an item is set up for usage meter reading, records are stored in (STS330) to be used for the calculation during rental invoicing.
Depending on which action that is made on the item and serial number, the record created in (STS330) gets an event type matching the action.
The different meter events are:
- Event 10 - created during PO receipt.
- Event 12 - created during checkout of the agreement line. 'Agreed total qty' in (STS330) is retrieved using the price list or, if no price list exists, through the contract item. The meter quantity reported during check out is displayed in the field 'Reading' in (STS330).
- Event 13 - created during check in of the agreement line. The meter quantity reported during check in is displayed in the field 'Reading' in (STS330).
- Event 40 - created when actual meter reading is performed when the equipment is at a customer site. The meter quantity reported is displayed in the field 'Reading' in (STS330).
- Event 50 or 51 - created when invoicing the agreement line. Event 50 is created when using arrears invoicing and event 51 is created when using advance invoicing.
- Event 60 or 61 - created if full credit is done. Event 60 is created if the debit invoice was recorded as event 50 and event 61 is created if the debit invoice was recorded as event 51.
It is important to report the meter reading connected to an agreement, event type 12, 40, and 13, using 'Rental Logistics Toolbox' Open' (STS140) and related option 18='Meter Reading' to open 'Equipment. Report Meter Reading' (MOS160) or using the API MOS160MI. If you open (MOS160) directly, to report the rental meter, the record is not created in (STS330) because event type is not known.
If the record is not created in (STS330) the meter calculation may not be correct during invoice calculation.
Records can be corrected using related option 18='Correction' in (STS330) or deleted using option 4='Delete' in (STS330) if a mistake was done during the rental meter reporting.
You are only allowed to correct or delete a meter event of type 12, 13, or 40, and only on the last record. You are not allowed to correct or delete a meter event of type 12, 13, or 40 if an invoice has been created or an invoice proposal exists.
Information in 'Model/Site Individual. Open Op History' (MOS270), 'Model/Site Individual. Open Op Cycle Readings' (MOS271), and 'Equipment/Ser Item. Open Meter Reading' (MMS241) is updated when an adjustment is made in (STS330).
Corrections directly in (MOS271) are not allowed for rental meters if a corresponding or later record exists in (STS330).
We recommend that you set security on the options 18='Correction' and 4='Delete ' in (STS330) so that only super users can do the updates. This can be done using the e-signature functionality.
From (STS330), use related option 17='Display Usage', to open 'Meter. Display Usage' (STS331).
This program displays the meter usage and over usage per agreement, item, and serial number.
Rental agreement line
When an agreement line is created for an item correctly set up for rental meter reading, an additional charge is automatically connected to the agreement line. This can be displayed in 'Rental Agreement. Connect Additional Charge' (STS103), which you open using related option 15='Addnl charges' from 'Rental Agreement. Open Lines' (STS201).
This additional charge is used when invoicing usage and over usage.
The agreement line meter prices can be managed using 'Rental Agreement. Update Meter Prices' (STS121), which is opened from (STS201) using related option 28='Mtr prc sch hdr' or (STS103) using related option 11='Mtr prc sch hdr' . The agreed quantity and over usage price in (STS121) are stored as specified on the price list, or from the contract item if a price list is not configured.
If fields like price list, rate type, days/week, or number of shifts are changed in (STS201), new agreed quantity and over usage price values are retrieved and stored in (STS121).
The field 'Agr total qty', 'Agr mtr unit prc', and 'Over usage price' can also be set manually in (STS121).
A reported rental meter value is mandatory in the delivery process and for the return process of the rental agreement line, for all items configured for rental meter reading. When this reporting is performed, event 12 and 13 are created in (STS330).
During the period when the equipment is at the customer site, you can also perform a meter reporting. This creates event 40 in (STS330).
To create the final invoice after equipment has been returned to the yard again, event 13 must exist in (STS330). That means that a check-in meter reading must have been performed. This is to secure a correct meter calculation on the final invoice.
How to calculate allowed usage and over usage
The information in (STS330) is used for the calculation of usage and over usage of meter quantity. How this information is used and what the result is on the invoice depends on the connected price schedule type.
Note that settings such as 'rate type', 'rate factor', 'days/week', and 'invoice period' also affect the calculation, following the same pattern as when calculating the regular rental rate.
There are three different price schedule types that determines how the meter and over usage is calculated when invoicing the rental line.
Price schedule type 14
When using price schedule type 14, reconciliation of agreed meter quantity is done every day. The calculation of allowed hours and over usage hours are done already before invoicing. When the agreement line is invoiced, any over usage is charged without considering the invoicing period of the agreement line.
This means that all meter readings in (STS330) not yet invoiced, are included in the invoice even though the meter readings may be done on a date later (or earlier) than the actual invoicing period of the agreement line.
For example, if the meter reading has been reported up until today's date and an invoice is created with invoice to date equal to Sunday last week, the meter reading reported up until today's date is included in the invoice calculation even though the invoicing interval for the agreement line is only until Sunday last week.
The verification of allowed hours is done per day, which means that the customer is charged for over usage if the equipment is overused on some days, even if the usage over the whole period is within the allowed hours.
For example, allowed hours are eight per day and the customer use the equipment ten hours the first day and six hours the next day. This results in an invoice charging two hours over usage for the first day, even though the total of the two days are within the agreed period of 16 hours.
Also, if days per week is set to five, but the customer uses the equipment all seven days of the week, the usage of the two days not included in the five-day week is charged as over usage.
Because reconciliation is done per day with price schedule type 14, the meter reading at the customer site must be reported every day to get the correct calculation of over usage.
| Allowed hours per day | Reported hours first day | Reported hours second day | Over usage invoiced for two days |
|---|---|---|---|
| 8 | 10 | 6 | 2 |
With price schedule type 14, the usage on the first day is charged as over usage.
Price schedule type 15
When using price schedule type 15, reconciliation of agreed meter quantity is only done one time and that is after the equipment has been returned. Any over usage is calculated and charged when creating the final invoice for the rental agreement line.
For price schedule type 15, any event 40 in (STS330) is not considered. Only event 12 and 13 are used in the calculation for this price schedule type.
At every invoice of the agreement line, a calculation is done for the allowed hours and this is saved in a file. When the final invoice is created, the hours saved in this file are summed up.
The difference between reported hours for event 12 and event 13 in (STS330) is calculated and if this difference is greater than the allowed hours saved in the file, these hours are charged as over usage on the final invoice.
For example, 240 hours are allowed per month. First invoice is created for one month. 240 allowed hours are saved in the file. In the next month the agreement line is terminated after ten days. Allowed hours per day is calculated using the rate factor on the agreement line, for this example the calculation results in eight allowed hours per day. These eight hours are then multiplied with the number of days on the invoice, which is ten.
The sum of allowed hours are 240 plus 80, which is 320 allowed hours.
If the meter was reported as 100 hours during check out, event 12 in (STS330), and then 450 hours during check in, event 13 in (STS330), the used hours at the customer site is 350.
| Allowed hours per month | Total allowed hours for 40 days | Total reported hours for 40 days | Over usage invoiced on final invoice |
|---|---|---|---|
| 240 | 320 | 350 | 30 |
This means the customer is charged for 30 hours over usage on the final invoice, as the 320 allowed hours is subtracted from the 350 used hours.
Price schedule type 16
When using price schedule type 16, reconciliation of agreed meter quantity is done per invoice interval. Any over usage during the invoicing period is calculated and charged when invoicing the rental agreement line.
The two main differences between price schedule type 14 and 16 are:
- Unlike price schedule type 14, type 16 calculates the over usage during the whole
invoicing period.
Allowed hours per day Reported hours first day Reported hours second day Over usage invoiced for two days 8 10 6 0 For price schedule type 16 the used hours are summed up and compared against the total allowed hours for the period. No over usage is charged in this example.
- Unlike price schedule type 14, type 16 only includes meter readings done within the
invoicing period, or earlier if not yet invoiced, when invoicing the agreement line.
The dates in (STS330) are compared with the dates in the invoicing interval. This means that if there are meter readings done and saved as event 40 in (STS330) with dates later than the invoicing interval, those records are considered on a later invoice.
Example with arrear invoicing:
Setup on agreement line is rate type set to week, five-days per week, and invoice period is weekly.
Customer has agreed on eight hours of allowed usage per day, which means 40 hours per week as it is a five-day week.
The customer uses a new machine, so the meter start value is zero hours. It is used for nine hours per day for the first three days and meter reading is reported each day during these days. Each reading amounting to nine hours, which means that the meter is at 27 hours on day number three.
An invoice is created for the full week with a meter reading that is two days old. Agreed usage for the invoice period is five times eight hours, equaling 40 hours. Total usage is 27 hours divided by five, equaling five point four hours per day during the invoice period. Over usage for the invoice period is then zero because allowed usage is 40 hours.
The next meter reading is done the same day as the second invoicing is done. The reading is 120 hours, and the allowed hours for two weeks are 80. The second invoicing hours are calculated as 120 minus 40 minus 40, which equals 40 hours over usage:
| Allowed hours per week | Reported hours first week | Reported hours second week | Over usage invoiced second week |
|---|---|---|---|
| 40 | 27 | 120 | 40 |
So, the second invoice is sent with 40 hours of over usage.
Example with advance invoicing:
Setup on agreement line is rate type set to week, five-days per week, and invoice period is weekly.
Customer has agreed on eight hours of allowed usage per day, which means 40 hours per week as it is a five-day week.
The customer uses a new machine, so the meter start value is zero hours. It is used for nine hours per day for the first three days.
The first invoice is sent together with the delivery of the machine, that means before any reading event of type 40 has been registered. Only the check-out reading has been done.
After delivery, meter reading is reported each day during the first three days. Each reading amounting to nine hours, which means that the meter is at 27 hours on day number three.
The second invoice for the second week is sent on day five. Last reading is 27 hours and the 27 hours is distributed over the first invoice period, that means the period that has already been invoiced. However, the charge for potential over usage is not invoiced until the second invoice.
Base for the over usage is 27 hours minus 40 hours, equaling negative 13 hours, so there is no over usage for this period.
The third invoice is created on day number ten, same day as a meter reading was done amounting to 88 hours. Base for the over usage for the second week is 88 hours minus 40 minus 40, equaling eight hours, meaning eight hours of over usage for the second week.
| Allowed hours per week | Reported hours first week | Reported hours second week | Over usage invoiced second week |
|---|---|---|---|
| 40 | 27 | 88 | 8 |
Using both advance and arrears invoicing, meters with price schedule type 16 can be reconciled over two periods or more. That means not the same period as the invoice period. For example, using the same setup as for the first arrears invoicing example, but without any meter reading done during the first week. Instead it is done during the second week. The reading amounts to 84 hours on Wednesday week two. The result for the calculated over usage for the second invoice then is 84 minus 40 minus 40, equaling four hours of over usage over a two-week period.
When using price schedule type 16, the recommendation is to have a meter price list configured in 'Rental Rates. Enter Meter Price' (STS124) especially if you use best price as rate type.
It is important that the price list in (STS124) is set up for the combination used on the agreement line, considering days per week and number of shifts.
If allowed quantity is agreed per month for a five-day week and two-shift work, the agreed quantity for a month with five-days must be set up, and also the agreed quantity for day and week for the given shift combination. The agreed quantity per day or week can be used if the invoice is created for a shorter period than one month, for example, when ending a contract.
Agreed quantity, shift, days per week, or rate type should not be changed when the machine is checked out and on rent. This is to avoid problems in the meter calculation.