Full Sail Partners Blog
Most firms that I work with utilize independent contractors to supplement their workforce. This isn’t a blog about “walks and talks like an employee, must be an employee.” For that, I recommend a good labor attorney. However, what I am going to clue you in on is about the proper way to track and account for independent contractor’s time in Deltek Vision.
Processing Contractor Time in Deltek Vision
In most situations, the desire is for the contractor to complete a timesheet and submit an invoice for processing by Accounts Payable (AP). There are two prevailing methods within Deltek Vision to process these types of situations:
- Zero Job Cost Rate
The contractor is set up as an employee, but doesn’t have a job cost rate only a billing rate. When time is posted there is no entry to the General Ledger (GL), but both the Time and Materials (T&M) invoice and project ledger reflect a billing dollar value. As a result, the AP invoice creates the GL entry reflective of the true cost of the contactors time
- Job Cost Variance
For this option, setup the contractor as an employee with a job cost rate. When the timesheet posts, the cost gets booked to a unique GL code reflective of contract labor. Additionally, this cost can also be included in the base for an overhead calculation. The credit end of the timesheet posting goes to Job Cost Variance similar to all other timesheets. As a result, the AP invoice is booked to an overhead project using the Job Cost Variance Account and thereby clearing it.
That Seems Simple…Right?
This is where the accounting can start to go awry. If method one is used and care isn’t taken to ensure the AP doesn’t also create a bill extension (effort) then the potential for exposure can be:
- Double counting of effort in project reporting leading to an understatement of profit or positive variance.
- Double earnings of revenue if the method is associated to effort.
To alleviate these concerns, apply the following workaround in Deltek Vision:
- Create an expense GL code table under Billing/Billing Rate Tables.
- Enter the AP GL code used above and attach a “0” multiplier.
By following these steps, the AP billing value will not be included in project reporting and you will not experience the effects of doubling down on your effort.
