Third Party Payments for Contractors

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Posted on by crlangfo

Hi Community,

I have been trying to come up with a solution on how to create vendor invoices for (Umbrella or Agency) for contractors that are posting time and expenses to a customer.

I need to create a bill to the customer for the T&M and a payment to the Vendor for the T&M.

The Bill

I have setup a Contractor/Worker linked to s standard calendar and i can post T&M to a project with uplift using the cost price and sales price and then create the invoice proposal with the correct cost and sales price. The voucher creates payroll entries for the worker that i would like to use to create the Vendor Invoice. (Not sure if this is possible?)

The Payment

? How do i pull in the T&M cost that needs to be paid to the Third Party Vendor to pay the Contractor??

Any ideas would be great?

Thanks

Craig

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André Arnaud de Cal... 300,924 Super User 2025 Season 2 on at

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Hi Craig,

Dynamics 365 F&O does not have good support for project based contractors. Usually, I did setup the system to post the offset of the cost to a specific suspension account when a contractor writes their time. At that moment, we can actually invoice the customer with the number of hours and the sales price.

When the vendor sends the invoice, you can check number of hours manually and post the invoice against that suspension account. Then you can actually check regularly this account for variances and do ledger settlements.

In your question, you mention that you want to create the vendor invoice. Do you have a self-billing requirement here?

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crlangfo on at

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Hi Andre,

Thanks for the prompt response.

Do you know if we have any ISV's that have built IP around this functionality? and yes to your question with regards to self billing. It is one of their main requirements to allow their vendors to see unpaid timesheets and create their invoices on T&M posted for their contingent workers.

Kind Regards,

Craig

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André Arnaud de Cal... 300,924 Super User 2025 Season 2 on at

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Hi Craig,

Microsoft had plans for self-billing, but moved it to the future. Anyway, it might be related to only procurement (purchase orders not project hours of contractors). There is no new plan known for this moment: docs.microsoft.com/.../change-history

At To-Increase, we have an ISV product for Advanced Project Management. I'm not familiar with all the features we added (I'm focusing on other solutions), but there are some improvements around subcontractors. www.to-increase.com/.../advanced-project-management.

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lmai 2,438 on at

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Andre',

Hmm. I don't think it will cancel out, though.

When you book the hour cost for the contractor's effort, you would

Debit the project cost (COGS acct)

Credit suspend account (9999)

When the vendor sent you an invoice, you would

debit 9999

Credit account payable.

Then you woud be out of balance for contractor expense debit.

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AM81 30 on at

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Hi Craig,

What was the outcome of your findings - did you manage to find a workaround, ISV or did you go for a customised solution?

I currently have the same requirement at a client around contractor billing via timesheets and using self-billing.

The self-billing part works great on PO's using vendor collaboration - the challenge now is just to tie this back using timesheets...

If you found a good solution, please let us know.

Thanks,

Arno

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