A pool structure is more formally referred to using terms such as indirect cost pools or indirect rates
Clients can use these indirect cost pools to burden the direct costs incurred on a project to help give them a more complete picture of a project's profitability. For example, let's say that an employee worked on Project ABC. Their labor worked on that project would be considered direct labor because it can be specifically identified to that project. But when looking at that project's expenses, if you stop there you are really just seeing the project's gross profit (i.e. revenue on that project minus any direct expenses). But to truly analyze the project's net project, there needs to be an application of the company's indirect costs to that project as well. This is where the indirect cost pools come in. Each indirect cost pool has a numerator with indirect costs (common examples are fringe, overhead, G&A) and a denominator with primarily direct costs (or certain indirect labor depending on the pool). Each of these cost pools calculates a rate. And these indirect rates then get applied to the direct costs incurred on a project. That way, you can get a true picture of net profit because you will see revenue minus direct expenses minus an application on indirect expenses from each of the cost pools.
Certain types of government contracts require that contractors submit information on their indirect cost pools in proposals - these are typically on Cost Plus Fixed Fee (CPFF) contracts.
Even if a client isn't pursuing any CPFF work, PCI still recommends setting up indirect cost pools / indirect rates because these can be used on internal project reports in Costpoint to better help measure a project’s true profitability. The most common indirect cost pools / indirect rates are Fringe, Overhead, and G&A. PCI recommends deploying 3 standard pools as a starting point knowing that changes can be made as needed as a business continues to grow.