For small jobs, you can create day sheets to bill your clients and ensure you’re being reimbursed for all your job costs. You can either do this on the desktop, or right in the field using Abio for Web.
For larger jobs, you can create shadow and parent jobs to isolate your actual costs to do the work from your client’s eventual costs. Intercompany invoicing between the shadow job and the parent job will apply the markups you’ve negotiated with your client. This will allow you to share extensive progress reports with your clients.
If you’re taking on a very large job, you may choose to spread the work over several subsidiary companies within your family of companies. One reason to use different companies is to limit liability to the company that holds the contract. You may also have companies that specialize in different kinds of work, such as electrical, plumbing, fabrication, or equipment. If all these companies are doing work on the same job, you need to allocate revenue and expenses between the various companies. You can use intercompany invoicing between the companies to do this.
Intercompany invoicing can be between jobs, or between companies within your family of companies. You can markup payroll, accounts payable invoices, and equipment. Plus, payroll can be at cost or at the job’s time and material rates. If you’re billing between a shadow job and a parent job, you’ll mark up labour at the time and materials rates.
Between companies, you may choose to bill your parent company at your own cost. The company holding the contract can add the markup. Abio’s Invoice Job Markups utility will automatically generate the accounts payable invoices to add the hourly and percentage markups to the job before it’s invoiced to the client.
To use Intercompany Billing, navigate to [b] Receivables, then [p] Intercompany Billing.
As discussed above, there are three ways to mark up payroll.
Set the source to ‘PR’ to invoice for payroll costs. Note that the description shows ‘Payroll Labour Dispersions’. Labour dispersions are a mechanism to isolate subsistence and other costs from the actual labour costs. They also allow you to make corrections to how job costs are allocated without having to redo payroll.
For our example, let’s bill labour costs at our own cost to our parent company. The parent company can then add markups before billing their client.
Abio displays the invoices created to record the billing.
Note that when we ran the utility we selected only unextracted records.
Each time you run the utility, the selected records are marked with the invoice they’re included on. We can filter labour dispersions on the extract reference to review what’s been included and what hasn’t.
Also notice that the hours are included as an invoice line item.
West Side Contractors can select to add a percentage markup on the invoice amount, or they can mark-up the hours from this invoice when they invoice job markups.
As we saw with internal equipment billings, processing these zero dollar invoices moves the revenue and expenses to the intercompany G/L accounts.
Between companies, equipment is billed at the 28-day rate. These are considered internal billings. Intercompany Billing handles external billings – where the client is billed for the use of the equipment. The client is billed based on the equipment timesheets posted to their job. The amount charged varies depending on whether the equipment is in use or on standby.
This option is rarely used. Typically, the company that holds the contract will take care of all the purchasing for the job. If, however, a parent company incurs startup costs before a new company is properly set up, those costs can be recovered by using source ‘AP’.
Payables items are moved at cost. HST is applied to all items except holdback. All net items including HST are cleared through the Intercompany General Ledger account. Holdback amounts are not cleared and remain outstanding.
As a final step, the cost items selected for invoicing are marked as extracted so they aren’t picked up a second time.
In the event an error is made, the invoices would have to be deleted and the cost items unextracted. Only some users have the ability to set the status of the cost items to unextracted. If your user id is set up to allow this, you would need to generate one of the reports specific to the type of extract. After exporting the data for the report, you will be given the option to unextract the cost items. The reports for this are:
There isn’t a report for unextracting equipment timesheets. Use the ‘z’ action to do this.