Managing Subcontractors with OpenAir

Nearly every professional service provider is familiar with using subcontractors to fill the gaps in a project in staffing or knowledge. There are a vast number of ways in which a professional service organization can engage with subcontractors. You may work with them through a vendor. You might work with them directly. They might be former employees – or future ones.

However you engage with your subcontractors, there are a few things that are true for any PS organization:

• You need to be able to manage them.
• You need to be able to pay them.
• You need to be able to report on projects and the costs associated with them.

The last true thing that can be added to this list is that OpenAir can make it easier to accomplish. Using OpenAir, you can record and track contractor skill sets, record hours or costs for invoicing and payment (even with variable rates), and you can report on project revenue and the impact of those subcontractors, all while protecting your OpenAir data.

Using Subcontractors in OpenAir

There are two basic engagement types that we see with subcontractors. Either there are individuals acting as subcontractors, or a vendor is managing one or several subcontractors for you.

If your individual subcontractor is billing on an hourly basis, there are some good reasons to set them up as a user within OpenAir, as well as a few downsides.

Pros: Giving your contractor access to OpenAir means they can directly enter their time, giving you visibility. Everything for your subcontractors will work the way it does for all of your regular employees, from approval workflows to reporting.

Cons: You’ll be burning a license for OpenAir for access and you’ll need to be hyper-aware of permissions and access for that user account.

On the other hand, if you’re working with a general vendor who is providing resources, the situation looks a little different.

Pros: Instead of setting up a number of accounts in OpenAir for subcontractors, you can use one license and have all time recorded with that single login, even against different projects. The notes and description fields can be used to determine which contractor did the work for those hours and that project.

Cons: This method relies on a single entity entering time for all subcontractors working for them and requires additional steps – like adding contractor identification into the notes – for visibility. It also limits your reporting and invoicing.

These are not either-or situations, however. At Top Step, we’ve worked with customers that use a combination of these approaches, depending on which fits the project, subcontractor arrangement, and reporting and invoicing needs in that situation.

Keeping Track of Subcontractors in OpenAir

When setting up subcontractors in OpenAir, it’s best practice to tag them in some way. For instance, you’ll want to have some flexibility in reporting, including or excluding these resources depending on what it is you want to see.

You could tag these resources using a custom field. Our recommendation for this, though, is to use entity tags. With an entity tag, you can create a dropdown list of employment status and be able to timestamp that status for that user.

This is useful for reporting on when subcontractors were actively working with you or not and permits you to report on that information, too. Entity tags can also help with the variable statuses of contractors. For example, it’s very common for a subcontractor to become a full-time employee, and while less common, there are instances where employees become contractors. Entity tags would give you the power to report on that individual as an employee, as a contractor, while they were active and when they were inactive, without additional overhead.

There are a few additional ways you can track information about subcontractors. One is entering information for them in their skills profiles, which could be as simple as their region or role or could include things like technical skills and capabilities.

Another is the ability to track variable billing rates for a single contractor. While many will have a single hourly rate that they charge for their services, others may have different rates depending on the work they are doing. This can get especially complicated if they are doing a variety of tasks for your organization, each with a different billing rate.

There are additional ways to track subcontractors in OpenAir, which we discuss as part of our webinar, Subcontractor Management Techniques in OpenAir.

Reporting with Subcontractors in OpenAir

Reporting is, of course, a crucial element of OpenAir. Understanding and reporting on profitability, project run rate, and even isolating contractor costs gives you the visibility to make important decisions about your business.

If you tag your subcontractors as recommended, it’s straightforward in OpenAir to report on a project’s profitability both with and without contractor costs included. You’ll also have the ability to get an invoice from your contractor to create an expense report for your project if needed. Items like this can even flow over to NetSuite to create as purchase items and rebill to the client using purchase billing rules.

OpenAir Can Make Working with Subcontractors a Breeze

There is much, much more that OpenAir can do to help you manage your subcontractors, their visibility and searchability, and reporting within the platform. There is more to learn as well, including account access and restrictions. We talk about these topics and others in our webinar, Subcontractor Management Techniques in OpenAir.

If you’re looking for a partner to help you automate and streamline your processes and grow your profitability, Top Step is here to help. Top Step has helped hundreds of clients configure for subcontractors as well as create customizations, integrations, and other efficiencies. Contact us today to chat about implementation, scripts, administration, or any other OpenAir topic. We’d be happy to help you, too.