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HJ
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Setting up subcontractor in QuickBooks for invoicing.

I will have subcontractors working for us and would like to learn the best possible way to set them up based on the following requirements:

- The subcontractor's employees will be entering timesheets (that we import from another system). This works just fine.  But not sure how I should set up this sub's employee in QB?

- The reason I want to collect time is so that I can invoice my client out of QB.  I do have the option to invoice out of the other system, but I rather use QB so that I can keep track of payments, reconciliations, etc.

- The subcontractor will be sending us an invoice and I would like to match the timesheet hours to the hours on the invoice.

 

We are a professional services/staffing company.

 

Thank you.

 

 

(Title has been edited by moderator for clarity)

 

 

Solved
Best answer 02-03-2018

Accepted Solutions
Established Community Backer ***

Re: Subcontract's employees/resources, time and invoicing

@HJ

 

This is really two distinct parts

The contractor is doing some work for you, who he uses, employees or other contractors, has nothing to do with your company

You can create a service item for contractor time, and use that item on a PO, transferring the hours from the time sheet to the PO

But the key is the contractor bill you receive.  When the bill comes in you would have to compare the PO time to the bill manually.  Assuming there is no issues there, you enter the bill and then you mark the charges as billable or not, and close the PO.

Then you invoice the client.

2 Comments
Senior Explorer **

Re: Subcontract's employees/resources, time and invoicing

Be carefull.  A subcontractor's time, or his employee's time, is never entered as payroll in QuickBooks. They are not employees of your company.  You are not paying their payroll taxes. You maybe be required to withhold tax from the money you pay to a subcontractor based on the W-9 and IRS rules.   

 

You can set up items for invoicing your customers that you will name something like 'Subcontractor Hourly Rate 1.0x', 'Subcontractor Expense', or whatever names are applicable.   

 

Create Sales Order - and as you recieve those timesheets, update it with the amount reported using those items  you created.  (Up to you if you enter one line per person per day, or combine them in anyway you see fit).  

 

When the job is complete, use the Create PO funtion from the  open Sales Order.   Enter the Subcontrators hourly rate on the PO.  Now when you receive his bill, it should match what was both reported and invoiced.   Go back to the Sales Order and create the invoice from the Create Invoice button.    Now the amount invoiced matches the amount on the PO you created.  (It also closes the Sales Order when 100% of the line items and quantities match.)

 

I hope this helps. 

 

Established Community Backer ***

Re: Subcontract's employees/resources, time and invoicing

@HJ

 

This is really two distinct parts

The contractor is doing some work for you, who he uses, employees or other contractors, has nothing to do with your company

You can create a service item for contractor time, and use that item on a PO, transferring the hours from the time sheet to the PO

But the key is the contractor bill you receive.  When the bill comes in you would have to compare the PO time to the bill manually.  Assuming there is no issues there, you enter the bill and then you mark the charges as billable or not, and close the PO.

Then you invoice the client.

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