Page tree
Skip to end of metadata
Go to start of metadata

Special Note

This page is intended for Unanet customers who do not have the Financials license type. If you have a Financials license, please visit the page below, which outlines considerations and workflow of either subs as licenses or subs as Vendor Invoices:
KC - Purchasing Guide - Initial Considerations.


Title: Capturing subcontractor hours and expenses in Unanet

Brief description:

Unanet provides several options for capturing subcontractor hours and expenses depending upon the level of detail required, controls desired, and licenses available for use.

If you need to track subcontractor hours in Unanet for invoicing or reporting purposes, time can be:

  • Logged directly by subcontractors in Unanet, using individual licenses.
  • Logged on behalf of subcontractors; this would also require separate licenses.
  • Entered using a single "dummy" user for all subcontractor time on all projects.

If you only need to track subcontractor expense (without subcontractor hours) in Unanet, labor can be:

  • Entered as expense in Unanet via expense reports and/or vendor invoices.
  • Represented by Locations in the timesheet.
  • Represented by a Fixed Price item or items.
  • Represented by an Additional Item on an invoice.


What’s covered in this document:

Using a license per sub

Logged directly by subcontractors in Unanet, using individual licenses

You can grant subcontractors direct access (time and expense user roles) into your Unanet instance to track all subcontractor hours and expenses.

Pros:

  • Real-Time Information - enjoy the same benefits of real-time information that you receive when employees save time or expenses in Unanet.

    • Reporting - see daily time and cost reporting to ensure there are no surprises at month end.
    • Margin reporting - accurate project margin reporting by project and also by subcontractor to determine profitability per person.
    • Approvals - Project Managers can review and approve timesheets and expense reports as soon as they are submitted rather than waiting for the invoice to come in a subsequent period.
      • Can also set up a representative from the subcontractor organization as a Customer Approver to reconcile all subcontractor time to their system and approve prior to Project Manager approval (this would provide evidence of subcontractor review and sign-off of time in lieu of a separate invoice).
    • Alerts - any project alerts, created to manage labor and expense budgets, will provide accurate, real-time notifications as time and expenses are entered in Unanet.
    • Better handling of the subcontractor funding process.

    • Help avoid delays in recognizing revenue. 

    • Produce more accurate ETC’s (Estimates to Complete).

  • Built in Controls - project assignments for subcontractors will allow Project Managers to control:

    • Specific projects, tasks, and labor categories that your subcontractors can charge against.
    • Budgeted hours and rates, based on subcontractor agreements.
    • Controlled period of performance in which subcontractors can report time and expense.
  • Invoicing

    • Invoice the customer as soon as timesheets and expense reports are in a LOCKED/EXTRACTED status
    • Avoid waiting to receive subcontractor invoice, or invoicing subcontractor expenses in the following period.
    • No time lost due to reconciliation of subcontractor invoice or paper time sheets, as Unanet is the single source of record.
    • Invoices contain full details (hours and dollars by person) rather than summarized amounts.
    • Significant reduction in Days Sales Outstanding (DSO).
  • Accelerate close processes

    • Recognize the revenue, expense and create the payable immediately, rather than waiting for subcontractor invoice or booking an accrual

  • Resource Planning

    • Utilize Unanet's skills/certifications solution to identify qualified subcontractor resources for future work.
    • Forecast/budget by individual subcontractor and compare actuals to those forecasts.

Cons:

  • Requires a user license for each subcontractor.
  • Potential subcontractor unwillingness to use Prime's timekeeping system.


Special Note regarding Person Organization Setup for Subcontractors

When setting up the license for the subcontractor, you will need to choose a Person Org in their Person Profile. You may elect to set this as either a Vendor Org or a Financial Org. Below are some pros/cons of each:

  • Vendor Org pro/cons:
    • Can select "V_" to isolate the subs reports where classification isn’t a selection criteria.
    • Can select "V_" to isolate the subs in the labor cost post where classification is not a selection criteria (this can be critical for companies where employees are bi-weekly).
    • Can eliminate these orgs from daily timesheet reminders.
    • Having many different sub vendors makes the People report cluttered because it breaks out the display by person orgs.

  • Financial Org pro/cons:
    • Can eliminate subs that are part of financial orgs from reminders by having separate approval groups.
    • Easier to see managers and who reports to whom in reports.
    • If the sub charges indirect time (OH or B&P), you will need to consider what the labor cost org is in Posting Groups.

Logged on behalf of subcontractors; this would also require separate licenses

Similar to granting them direct access; you would create individual profiles for your subcontractors, but a representative of your organization would enter time on their behalf.

Pros:

  • Same as above (though Subcontractor Approval may not occur if not physically entering time in the system).

Cons:

  • Requires a user license for each subcontractor.
  • Requires resource to enter time on behalf of subcontractor(s).
  • Real-time reporting may not be as accurate depending upon frequency of time entry.
  • Lose subcontractor self-certification upon submission/approval of timesheets.

Without using a license per sub

Using one license to represent all hours for all subcontractors

Enter time using a single "dummy" user for all subcontractor time on all projects. Create a single user to represent all subcontractor hours, and enter based on inputs from subcontractors. Could identify specific subcontractor organization utilizing the location or task fields.

Pros:

  • Real-time reporting and alerts (provided timeliness of entry).

  • Built-in controls surrounding budgeted hours and rates, as well as Period of Performance.

  • Invoice the customer as soon as timesheets and expense reports are in a LOCKED/EXTRACTED status.
  • Forecast/budget by total project subcontractor labor and compare actuals to those forecasts.
  • Requires only one license.

Cons:

  • This method is not recommended for Cost Plus contracts.
  • For Fixed Price or Time & Materials contracts, this method is often used in conjunction with expense reports (most often, the "dummy" account is used to load hours and applicable bill rates, and expense reports are used to load the associated labor cost to the project).
  • Requires resource to enter time on behalf of subcontractor(s).
  • Real-time reporting may not be as accurate depending upon frequency of time entry.
  • Lose subcontractor self-certification upon submission/approval of timesheets.
  • Invoices contain partial details (hours and dollars by total subcontractor labor) rather than individual subs.

Entered as expense in Unanet via Expense Reports and/or Vendor Invoices

An Expense Type can be created for each subcontractor, and subcontractor labor can be entered as expenses via Expense Reports via the user interface or via import. Alternatively if you have a Financials license type, you can enter as Vendor Invoices via Accounts Payable. In either case, visibility and usage of the Subcontractor Labor Expense Types can be controlled by the Administrator. A separate payment method can be also be created to associate the expense type to the corresponding payment method.

Pros:

  • Forecast/budget by total project subcontractor labor and compare actuals to those forecasts.
  • Requires only one license.
  • Allows for attachments of Subcontractor Details (which could subsequently be added as backup documentation for invoice).

Cons:

  • No hours detail will be displayed in reports or on the invoice.
  • Lose real-time reporting, as this will likely only occur at month end.

Represented by the "Location" value in the timesheet

Locations can be used to capture labor. A location can be created for each subcontractor (i.e., SUB-AVEDA) and this location can be tied to hours entered into a timesheet. Hours can be entered using a generic User ID (for example, unanetadmin), and it can then be tied to the individual subcontractor location.

Represented by a Fixed Price item or items

Pros:

  • Not reliant on completion of timesheets/expense reports to complete and can be added to any invoice.
  • Could provide details of hours/individuals in description field.
  • Will reduce funding and is controlled by Billing/Revenue limits established by the project.

Cons:

  • Revenue Item only; no expenses will be in the system for this, as the cost of subcontractor labor expenses will not be recorded.
  • No subcontractor self-certification.
  • No direct way to attach subcontractor invoice/details (would separately need to leverage Project Notes).

Represented by an “Additional Item” on an invoice

Pros:

  • Not reliant on completion of timesheets/expense reports and can be added to any invoice. Additional Items are added at the very end of the invoicing process.
  • Could provide details of hours/individuals in description field.

Cons:

  • Revenue Item only; no expenses will be in the system for this, as the cost of subcontractor labor expenses will not be recorded (there are some potential workarounds with utilizing custom job cost reports, but doing so is not a best practice).
  • Additional Items do not reduce funding nor are they controlled by Billing/Revenue limits established by the project.
  • No subcontractor self-certification within Unanet.
  • No direct way to attach subcontractor invoice/details (would separately need to leverage Project Notes).

Additional Information

KC - Webinar - Subcontractor Management in Unanet

KC - Quick Topic - Create Subcontractor A/P Invoices from Subcontractor Timecards

KC - Purchasing Guide for Financials Customers (Best practices for subcontractor management for Financials users)

KC - Unanet Accounts Payable Instructional Guides