This article is relevant if you are using the NetSuite Advanced Projects module and you wish to streamline the work required to process timesheets and their associated vendor bills.
My NetSuite Systems Integration practice, Prolecto Resources, offers expert NetSuite services on a time and materials basis. ¬†As such, we are heavy users of NetSuite’s Advanced Projects module. ¬†All time entered in the timesheet by staff is reviewed for reasonableness and ultimately offered up on our client invoices as evidence of services rendered.
In some respects, this business model is a common practice used by staffing organizations. ¬†I know this business model well because in the year 2000, I sold my eCommerce firm, InterScore, Inc., to an established ERP staffing organization in Southern California. ¬†While running the eCommerce practice in this organization, I studied carefully the overall business practice used in staffing world.
Fundamentally, the staffing organization that purchased my firm offered up individual experts to companies that needed ERP help on an hourly basis. ¬†The practice was simple to understand but often times had high administration costs:
- Hire Outside Expert: A individual would be hired in a 1099 contractor capacity to engage on a staffing project.
- Track Time: The individual would produce a weekly timesheet and have it signed by the hiring manager.
- Submit Tracked Time: The staffed individual would then submit the approved timesheet to the staffing organization for processing.
- Track Obligation: The staffing organization received the approved timesheet and would then book an obligation to the contractor at an agreed rate. ¬†Manually of course.
- Bill Customer: Simultaneously, the staffing organization would markup the rate paid to the 1099 contractor and compile a customer invoice requesting payment for services rendered.
How NetSuite Advanced Projects Almost Fits the Staffing Model
The practice above was helpful to outline because NetSuite’s Advanced Projects module gets close to solving many of the coordination and accounting concerns common in staffing organizations. ¬†Here are some of the most important elements:
- Project Constitution: A customer can have more than one project and each project can have multiple tasks.
- Assign Individuals and Cost/Price: Each project task can be resourced by individuals at a particular cost and price.
- Capture Time by All Parties: Projects can be resourced by both internal employees and external (1099) vendors. ¬†NetSuite allows vendors to enter timesheets built into the module subscription price. ¬†Everyone loves this!
- Timesheet Backs the Invoice: Timesheet entries can be routed for customer billing purposes.
- Accounts Payable: The vendor bill system is connected to the purchase order system (traditional accounts payable practice).
- Disconnected Systems: The purchase order system (AP) and the timesheet system (Advanced Projects Module) are not connected (yet the API can connect them).
- Manual Bill Entry: Since there is no connection between the AP system and the timesheet system, you must manually manage the obligations created by 1099 contractors.
Re-evaluating the use of the NetSuite Purchase Order System
- NetSuite’s Advanced Projects module already captured the cost for the outside contractor services.
- If we setup the project correctly, then we have everything we need to properly record the obligation to the outside expert.
How We Create Vendor Bills from Submitted NetSuite Timesheets
Create a NetSuite Time Approval and Vendor Payment Workflow
- Submissions: Give staff a clear way to submit a timesheet for approval.
- Notifications: Produce an email and reminder notification that the submitted timesheet needs to be approved.
- Late Reminders: Produce reminders to staff if their timesheet is late.
- Time Review: Give project managers a way to see if the time entered is reasonable. ¬†If not, allow notes to be captured and reject the timesheet.
- Reject and ReSubmit: Automatically send rejected timesheets back to staff to modify the timesheet to address concerns.
- Generate Vendor Bill: Once the project manager approves the timesheet, if staff is an outside contractor, generate a NetSuite vendor bill using the project cost definitions.