Defining MSP Fees

The MSP fee is only seen by the organization that is paying that fee.

In a Buyer-Funded program, the configured MSP fee is paid for by the buyer. So if WorkingNet uses an MSP—CoLabor8—to manage its external workforce procurement program. CoLabor8 will add a percentage for each transaction. So if reCrewIT presents their Bill Rate as 97.09, CoLabor8 will add 3% to that (2.91) and add it to the WorkingNet’s Bill Rate (100.00). The difference is because of CoLabor8’s service fee.

In a Supplier-Funded program, the MSP fee is paid for by the supplier. So if reCrewIT is paying Colabor8, their bill rate will be higher than WorkingNet’s.

Multiple suppliers can participate in a supplier-funded model. Each of the suppliers engaged in the program can then pay a portion of the fee, spreading out the cost.

If a customer wants to pursue a supplier-funded model, it’s important that this be negotiated in each of their supplier agreements.

In the Markup method, the MSP Fee is added to the supplier bill rate.

Let’s say we have a supplier bill rate that is 97.09. The MSP fee is set to 3%. We will multiply the supplier bill rate by the MSP Fee percentage to get 2.91. We then add this fee to the supplier bill rate to get the buyer bill rate of 100.

With the Markup method, the MSP fee is a percentage of the supplier’s bill rate added onto the buyer's bill rate.

In the Discount method, the MSP fee is subtracted from the buyer bill rate.

So we start with the same buyer bill rate at 100 and the MSP fee is still set to 3%. We will multiply the buyer bill rate by the MSP Fee percentage to get 3. We then subtract the 3 from the buyer bill rate to get the supplier bill rate of 97.

With the Discount method, the MSP fee is a percentage of the buyer’s bill rate subtracted from the supplier's bill rate.

The only deciding factor in which type of MSP Fee Calculation should be enabled and configured for a tenant in SAP Fieldglass is what the agreed upon terms have been negotiated between the customer and their MSP Supplier.

When a buyer uses an MSP, the "MSP Calculation for Contingent" configuration option is enabled to specify which method should be used to calculate the MSP fee for all applicable contingent modules.

The MSP configuration options are set when the buyer tenant is configured in SAP Fieldglass.

Additionally, when a customer’s MSP is used to manage their Services program, the company configuration ‘MSP Calculation for Services’ must be enabled and either a Markup or Discount calculation method must be chosen.

The final configuration that must be in place for an MSP Fee to be used in a program is to set the Supplier's MSP configuration through the Buyer's administrative view of the supplier record. Here we can see where the details can be configured:

MSPs can configure their fee specifics for both non-rate components and rate components. The benefit of configuring both is so that an MSP fee is calculated in their workflow whether a rate that’s being used has a rate component group associated to it or not.

MSPs can configure both non-rate and rate components for their individual clients. Here the MSP is configuring their rates for WorkingNet.

If a customer plans to configure their MSP Fee outside of the Rate Component functionality, they would populate their MSP Fee details in the Non-Rate Components section. Here they can enter a % for the application to calculate, or a flat fee per transaction that must be broken out per currency that’s enabled.

If a customer wants to build their MSP Fee calculation into their Rate Component structure, they will fill in the details here- in the Rate Components section. Each currency would require its own designation of either Percentage or Flat Fee depending on which types are enabled at the company configuration level. The specific percentage or flat fee values are not configured here because they would be built out within the rate components in the tenant.