# How to Set Up Indirect Rate Pools in Deltek Costpoint > Source: https://netray.co/erp-help/deltek-costpoint-how-to-set-up-indirect-rate-pools > Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems. > Section: ERP Help ## Short answer Indirect rate pools in Costpoint group related indirect costs, such as fringe, overhead, G&A, or material handling, so they can be allocated to direct cost bases using a defined rate. Pools and their bases are configured under the Indirect Rate Structure area, with pool tiers sequenced so that lower-level pools like fringe allocate into higher-level pools like overhead before G&A is calculated. ## Kind how-to ## System small-erp ## Erp Deltek Costpoint ## Module Cost Point / Indirect Cost Management ## Query How to set up indirect rate pools in Deltek Costpoint ## Alternate Queries - Deltek Costpoint burden pool setup - Costpoint indirect rate structure - Deltek Costpoint overhead pool allocation - Costpoint provisional vs actual rates ## Applies To Deltek Costpoint 7 and 8, Cloud and on-premise ## Steps ### Set up an indirect rate pool structure in Costpoint **Items:** - Go to Cost Point > Indirect Rate Structure > Pools and create the pool, such as Fringe, Overhead, G&A, or Material Handling. - Assign the pool a sequence or tier if it allocates into another pool, for example Fringe allocating into Overhead before G&A is calculated. - Define the Pool Base under Pool Bases, selecting the account groups or labor categories that make up the base, such as direct labor dollars. - Link the pool's expense accounts under the Accounts tab so relevant GL postings roll into the correct pool automatically. - Set up the Rate record for the applicable period under Rates, choosing whether it is provisional, target, or actual. - Run the Indirect Cost Allocation process, or the standard Costpoint close routine, to apply pool rates against their bases. - Review the Pool Detail or Rate Analysis report to confirm allocations match the expected rate times base calculation. - Reconcile total pooled costs allocated against the GL indirect expense balances for the same period. - Adjust provisional rates and rerun the allocation once actual rates are finalized, typically as part of the year-end rate true-up. ## Sections ### Pool tiers and sequencing **Body:** Most government contractor rate structures use a tiered pool sequence, commonly Fringe allocating into Overhead, and both then flowing into G&A on top of a total cost input base. Getting this sequence wrong, for example calculating G&A before Overhead has finished allocating, understates the G&A base and produces a rate that will not reconcile against the total cost pool at period end. Costpoint's Pools setup lets you define this sequence explicitly, and it is worth confirming the sequence against the organization's approved rate structure (often documented in a DCAA-reviewed forward pricing rate proposal) rather than assuming the default order matches the company's actual cost accounting practice. ### Provisional, target, and actual rates **Body:** Provisional rates are the estimated rates used for billing and cost projection throughout the year, before actual costs are known. Target rates represent budgeted or forecast rates used for planning. Actual rates are calculated from real incurred costs once a period, or the full year, closes, and government contractors typically use the gap between provisional and actual rates to calculate a true-up billing adjustment. Keeping provisional rates unchanged for an entire fiscal year when actual costs have clearly diverged is a common source of a large, unpleasant true-up adjustment, and can draw additional DCAA scrutiny on contracts subject to incurred cost audits. ### Pool bases and what belongs in each **Body:** The pool base defines the denominator the pool rate is calculated against, for example total direct labor dollars for a fringe or overhead pool, or total cost input for a G&A pool. Mixing direct and indirect labor accounts into the same base by mistake, or omitting a labor category that should be included, distorts every rate calculated against that base, not just the specific pool where the error was introduced. ### Reconciling to the general ledger **Body:** Pool Detail and Rate Analysis reports show the calculated allocation, but the number that matters for period close is whether that total agrees with the GL's indirect expense accounts for the same period. A mismatch almost always traces back to an expense account that was posted to the GL but never added to the pool's Accounts tab, leaving those costs unpooled and unallocated even though they are sitting in the ledger. ## Pitfalls - Pool sequencing set incorrectly causes fringe or overhead to skip a tier, understating the G&A base. - Mixing direct and indirect labor accounts inside the same pool base by mistake. - Using provisional rates unchanged all year without revisiting them, creating a large true-up adjustment and inviting DCAA scrutiny. - Forgetting to add a new expense account to a pool's Accounts tab, leaving those costs unpooled and unallocated. - Running the allocation process out of period order, which can misstate cumulative rates for later periods. - Not reconciling pool totals against the GL before closing the period, letting a mapping error compound month over month. ## Ai Angle ERPray for Costpoint, grounded on the pool, base, rate, and GL account configuration for a given entity, can trace a reconciliation gap back to the specific account missing from a pool's Accounts tab, or the specific period where a rate was never updated from provisional, faster than manually cross-checking each screen against the trial balance. Rerunning an allocation or adjusting a rate remains a deliberate action taken by the accounting team, since it directly affects contract billing and closed-period financials. ## Faq ### What is the difference between provisional and actual indirect rates? **Answer:** Provisional rates are estimated rates used for billing and cost projection during the year, before actual costs are fully known. Actual rates are calculated from real incurred costs, typically at year-end, and used for a true-up adjustment against what was billed provisionally, which is often required for government contract compliance. ### Can Costpoint handle multiple pool structures for different contract types? **Answer:** Yes, separate rate structures can be defined and assigned by organization, allowing different contract types or business units to use distinct pool sequences and bases rather than forcing a single company-wide structure on every contract. ### How often should indirect rates be updated? **Answer:** Most organizations review provisional rates quarterly against actual cost trends and finalize actual rates annually as part of year-end close, though the right cadence depends on how volatile the organization's indirect cost base is during the year. ### Why don't my allocated pool costs match my GL indirect expense balance? **Answer:** This is almost always caused by an account that was posted to in the GL but never added to the corresponding pool's Accounts tab, or a timing mismatch where the allocation ran before a late GL entry was posted for the period. ## Search terms deltek costpoint indirect rate pools, costpoint burden pool setup, costpoint overhead pool, costpoint fringe pool, costpoint provisional vs actual rate, costpoint pool base setup, costpoint rate true-up, costpoint indirect rate structure --- Talk to an engineer: https://netray.co/contact?intent=erp_ai | Machine catalog: https://netray.co/agent/catalog.json