What are Time-based charges and how do they extend daily rates?

Time-based charges apply a cost structure where the average daily cost of an asset decreases as its time at a cost location increases. This is achieved by using different rate -daily, weekly, or monthly- based on how long the asset remains onsite. As the duration grows, lower rates are applied, reducing the overall daily cost.

New Cost Type: "Time-based"

To enable time-based charging for an asset:

• Go to the Asset or Asset Template.
• Select the "Time-based" cost type from the available options.

This activates the configuration fields for defining your time-based cost schedule.

Defining the Time-Based Cost Schedule

Once the time-based cost type is selected, you must define the following parameters:

Daily asset cost

• The default daily charge when the asset is first placed at a location.
• Applies until the weekly or monthly rate becomes active.

After 'X' workdays (Weekly rate threshold)

• Set how many workdays (2–6) the asset must stay before switching to the weekly rate.

Weekly Asset Cost

• A fixed cost is charged once the weekly threshold is met.

After 'X' workdays (monthly rate threshold)

• Set how many workdays (3–26) the asset must stay before switching to the monthly rate.

Monthly Asset Cost

• A fixed cost is charged once the monthly threshold is met.
• Covers the entire calendar month.

Time-Based Cost Calculation

 Monthly Calculation Rules

Time-based cost calculations are structured around calendar months. Two key rules apply:

• New Month, New Start: Cost calculations reset at the start of each calendar month. Even if an asset qualified for a weekly or monthly rate in the previous month, it starts fresh in the new month.
• One Rate Per Month: After applying the monthly rate, there are no additional daily or weekly fees. This simplifies billing and prevents double charges.

Current Asset Cost in List View

For assets with time-based cost settings, the list view displays the current asset cost. This cost is calculated based on the relevant rate (daily, weekly, or monthly) for the most recent completed day.

• The cost updates automatically at the end of each workday.
• It may decrease if the asset qualifies for a weekly rate after daily charges.
• It may increase again if the monthly rate applies later.
• The cost keeps changing while the asset stays at the location.
• Once the asset leaves, the cost becomes final—unless settings are changed.

Report-Based Cost Calculation

When generating reports for specific date ranges:

• The system calculates costs only for the selected report period.
• It uses the same time-based rules (daily, weekly, monthly) as regular cost tracking.
• Each calendar month is treated separately; days don’t carry over between months.
• Cap rules still apply: If the monthly threshold is met within a month, the cost won’t exceed the monthly rate, even if the report covers only part of that month.

Key Principles to Remember 

• Time-based thresholds (e.g., 5 days for weekly, 20 days for monthly) apply per calendar month.
• Only days within the report range are used to calculate the cost.
• Monthly caps ensure the cost doesn’t exceed the monthly rate once the threshold is met.

General Example

Scenario:
An asset is onsite for 10 consecutive workdays:

• 6 days fall in Month 1
• 4 days fall in Month 2

Result:

• Month 1: Charged for 6 days
• Month 2: Charged for 4 days
  Even if the total duration is 10 days, the system calculates charges per month, not cumulatively.

Detailed Examples

Assumptions:

• Workdays = Monday to Friday
• Weekly threshold = 5 workdays
• Monthly threshold = 20 workdays

Example A

• Arrival: 1st Oct 2022
• Departure: 21st Nov 2022
• Workdays: 21 in Oct, 15 in Nov

Example B

• Arrival: 21st Oct 2022
• Departure: 24th Nov 2022
• Workdays: 7 in Oct, 17 in Nov

Notes:

• Monthly Rate Reset: Each month is treated separately. Days from one month don’t count toward the next month’s rate threshold.
• Cap enforcement: If the monthly threshold is met, the cost won’t go over the monthly rate, even if the report only covers part of the month.
• Workday-Based Calculation:  All thresholds and costs are based on workdays (usually Monday to Friday), not calendar days.

If you are interested in understanding asset cost capping and how it is applied, please check: Asset Cost Capping: What is it and how is it applied?