How granular should EP line items be? Should they be at the User Story level or at the Feature level?
When creating line items in EP, less is more. Start by creating line items at the feature level, rolling up several line items and/or user stories from the initial proposal in to single feature-level line items.
If and when the need arises to increase the level of granularity of the line items because a client requests or it is required by their accounting department to process future payments to Clarity, then and only then is it recommended to spend the additional time it takes to break-out the line items by user story or specific activity.
If a higher degree of granularity is required, the impact to the budget must be clearly communicated and documented so that the client is fully aware that deviating from our normal reporting model will increase the PM line item's estimated hours. As a result this will have a negative impact on the budget and should be documented and communicated. The impact can be negligible or it can be quite high depending on the type of project, and the number of features and user stories, and/or activities taking place.
The project manager must use his or her best judgement to gauge the impact and communicate it clearly; in addition, it may be reasonable to have the client approve a change request for the additional time that would be required.
It is not necessarily required, but highly recommended that any PM's new to Clarity should communicate any deviations from the standard reporting process to management to ensure that audits are handling the special cases appropriately.
There are many ways of thinking about this and when creating line items in EP. One or another way is not necessarily right or wrong. It is very important that project manager's use their best judgement when making a decision as to how line items, and ultimately the budget, is managed. Bottom line is, it really boils down to what you and your client agree on that works for both Clarity and the client company, and at the end of the day ensures that the hours balance does not become negative and invoices continue to be paid on time, maintaining a healthy budget and a happy client.