Does your service center have multiple lines of service? Is every line of service providing something different to the customer base that requires a separate rate?
When different lines of service provide a similar type and level of service with no notable differences to the customer base, a department might consider combining those lines of service. One example could be the labor rate to run a machine. Although the employees running the machines may have different salaries and levels of expertise, it may make sense to blend the individual employees’ rates together.
Government Costing worked with a department that had 43 lines of service. After reviewing the various rates, it was determined that most services required the same amount of time and effort and could be combined. The department combined many of its lines of service into seven different lines of service. This resulted in:
- Easier billing efforts
- Less confusion for the customers
- A more straightforward allocation process during the rate calculation
The cost versus benefit of the additional tracking and billing efforts should be considered when determining if lines of service can be combined.
If you would like assistance in determining if your lines of service can be combined, feel free to reach out to System Government Costing.
Contact
If you have questions about Facilities & Administrative rates and how they are calculated, feel free to consult System Government Costing’s “Who to Ask” list to find an expert who can help.
