What You Should Know
What is a Variable Cost Service Requisition?
A variable cost service requistion is a requisition that is based on the number of units of work to be worked, along with the ‘rate’ of work. For example, the cost to hire temporary help is usually based on the hours worked. For this type of service the number of hours to be worked and the rate is certain until the job is complete.
Learn more about How to Create a Variable Cost Service Requisition.
When to use a Variable Cost Service Requisition?
A Variable Cost Service Requisition can be created for one time and recurring services where there is a defined bill rate and number of hours to be worked. The typical example of this is contingent/temporary staffing services. For these services, the Variable Cost Service Requisition provides a straight forward way to establish the bill rate, scope of work, and expected hours to be worked for such suppliers.
Variable Cost Service Requisitions should only be used when the ‘rate’ and expected ‘hours of work’ are known, it is not appropriate to use to create a PO for a general estimate or ‘rough quote’. When specifying the description, the individuals name and role/title should be included. The line level comments should include any specific scope of work summary for the individual.
Establishing a contractor for a short term project for $3,600 over five weeks. The contractor's rate is $22.50 per hour, for a 160 hours. This would be a ‘rate’ of $22.50, with hours worked being ‘160’.
Establishing a long term temporary staffing order for three accountants for six months. There are three rates, one for the supervisor, and one each of the staff accountants. This would be three variable cost requisition line items as illustrated below: