RE: How to handle a subcontract in Project Management and Accounting
To ensure that subcontract activities are not booked as direct expense journals without a purchase order, you can set up a procurement category specifically for subcontracting. This category can be associated with the subcontracting project category and expense type, and configured to require a purchase order before any expenses can be booked against it.
To set this up, you can follow these steps:
Create a new procurement category specifically for subcontracting expenses.
Associate the new procurement category with the subcontracting project category and expense type.
Configure the procurement category to require a purchase order before expenses can be booked against it.
When creating purchase orders for subcontracting expenses, be sure to associate them with the correct project and WBS code to ensure that the expenses are booked against the correct project.
Regarding the GL accounting, you will need to set up appropriate accounting codes for the subcontracting procurement category, as well as for the project and WBS code. These codes should be associated with the appropriate general ledger accounts to ensure that expenses are correctly recorded in the financial statements.
Overall, by setting up a procurement category specifically for subcontracting expenses and requiring purchase orders, you can ensure that these expenses are properly controlled and tracked in your project accounting system. Additionally, by setting up appropriate GL accounting codes, you can ensure that the financial impact of these expenses is accurately reflected in your financial statements.
