Billing subcontractors to clients

CherieDO · ‎March 26, 2020

We currently have subcontractors working for us that we want to bill to clients as if they were staff, by tracked time by project. We pay these subs as vendors by creating a bill based on the timesheets they have submitted.

I have set up an item to use when inputting their time so that it is expensed when input but posted to income when we invoice them to the client.

When I create a client invoice that includes a sub's time, I add their time using 'adding time and costs' and selecting their time from the 'time' tab, but because I've also created an invoice for the sub in order to pay them as a vendor, their invoice also shows up under 'items', which I assume I also have to import onto the client invoice.

Because I don't want to double-bill the client, I delete line item showing the sub's invoice. But should that invoice be showing up as billable to the client at all? When I use the sub's time to create their own invoice to pay them, should I be using the checkbox to mark their time as billable, or should I leave them empty since I've already marked their time billable through the use of timesheets?

AndréB · ‎March 26, 2020

Hey CherieDO,

I'm happy to see you're taking full advantage of billable time to further streamline your invoicing. QuickBooks Desktop includes powerful time-tracking features, making it easy to know how much your employees and contractors are costing you. To avoid double billing your customers, it's crucial to record your sub-contractors' hours correctly. I'll be happy to assist you with this.

You already seem to have a solid understanding of how the system handles this. Typically, hours recorded for a Vendor would not be marked as billable, as the Bill or Cheque would be made billable instead. The important part is that only one of them should be marked as billable, unless they both need to be included separately on an invoice. If you'd prefer to add the Time activity to the invoice instead of the Bill, continue marking the Time as billable but keep the box unchecked when you pay your subcontractor.

Let me know how this goes!

View solution in original post

AndréB · ‎March 26, 2020

Hey CherieDO,

I'm happy to see you're taking full advantage of billable time to further streamline your invoicing. QuickBooks Desktop includes powerful time-tracking features, making it easy to know how much your employees and contractors are costing you. To avoid double billing your customers, it's crucial to record your sub-contractors' hours correctly. I'll be happy to assist you with this.

You already seem to have a solid understanding of how the system handles this. Typically, hours recorded for a Vendor would not be marked as billable, as the Bill or Cheque would be made billable instead. The important part is that only one of them should be marked as billable, unless they both need to be included separately on an invoice. If you'd prefer to add the Time activity to the invoice instead of the Bill, continue marking the Time as billable but keep the box unchecked when you pay your subcontractor.

Let me know how this goes!

KungFuMel · ‎October 07, 2020

Hello,

We have a similar subcontractor billing situation, but I had a question about taking it one step further. Is there a way to compile all the subcontractors hours worked for a customer that we've logged in their timesheet and then look at that vs. what we've paid them with "Enter Bills" to see if there's still outstanding hours they need to be compensated for?

Thanks for your help!

LauraAB · ‎October 07, 2020

Hello KungFuMel,

I'm glad you stumbled upon this thread discussing billing subcontractors to clients. I appreciate the explanation of what you're looking for in a report, and I can absolutely see how that would help with keeping your time and the bills in line. I'd be happy to go over this with you.

QuickBooks Desktop has a number of reports you can consider to see the information you're looking for. In this case, there isn't a single report that will show this comparison of time sheet hours versus the bills to the vendor, but you can consider running a couple of reports.

To start, if you visit the Report Centre through the Reports menu, you can use the search bar to search for time-related reports. Even using a simple keyword like "Time" brings up a variety of time and billed/unbilled hours reports. Depending specifically on the information you're looking for and whether you're marking the time or the vendor bills as billable, a billed/unbilled report, such as Billed/Unbilled Hours by Person may work for you. In this case, you can use this report if it's the timesheets that you're marking as billable.

I encourage you to browse through those reports to find the one that works for you, then once you've got that open, you can return to the Report Centre to search for an appropriate vendor report. Something like the Transaction List by Vendor may do the trick. You can use the Customize Report button after running it, then click the Filters tab if you'd like to filter only for a certain transaction type. The article Customize reports in QuickBooks Desktop can walk your through the options step by step.

To take this kind of reporting to the next level, you can consider exporting the two reports to combine the information in an Excel worksheet so you can organize the information the way you'd like. This article has details about exporting reports: Export reports as Excel workbooks in QuickBooks Desktop

Another option for streamlining this process even more is considering third-party apps that might simplify managing and organizing this kind of data. There are several apps to choose from that connect with QuickBooks Desktop, so there may be one that can help with this kind of thing as well. Check out our Apps for QuickBooks Desktop page to start your search.

Finally, this is a good opportunity for feedback. By going to the Help menu and choosing Send Feedback Online, you can share your thoughts about the available features in the program and what you'd like to see in future updates. Our product development team uses the feedback received as they continue to grow the program.

Don't hesitate if you've got more questions!

Vagabali · ‎August 15, 2022

Hi QB Team,

could you please give me a brief instruction or guide me to a video explaining how to track subcontractors' timesheets and pay them based on these timesheets? I need to enter their time from the paperwork, create a paycheque, link to projects, make reports per project and at the end to create T4As & T5008.

Thank you!

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