Simplifying Subcontractor Management in OpenAir With These 3 Tips

There are many reasons that a professional services organization might need or want to bring on a subcontractor. Maybe there is the opportunity for work that a company has resources for, but only in the short term. Perhaps a project calls for a skill set that an organization doesn’t have on the team. Whatever the reason, bringing in subcontractors is a normal part of a professional services business.

Bringing on subcontractors means figuring out how to manage them, what they have access to, and even how to view and handle their work costs. OpenAir offers a great deal of functionality that simplifies the back-office pieces of subcontractor management. 

Documenting Subcontractor Time

There are multiple ways in which you can engage subcontractors for your projects. So it’s important that you have a flexible system to document subcontractor time. For example, you may bring on a subcontractor with a particular skill set missing from your team to complete a project. Or, you may have a significant portion of a project that requires an entire outsourced team to complete.

In the first case, it’s pretty simple to provide a single subcontractor with an OpenAir license so that they can record their time. However, In the second case, giving each subcontractor on the outsourced team an OpenAir login may not be feasible. In that case, it makes more sense to have a designated resource enter the team’s hours into the PSA.

In both cases – either by allocating one or two logins to a small number of subcontractors or a single license for a group – controlling access beyond time entry is relatively easy on a case by case basis. Project managers are, however, are a special case. If you have a contract project manager in place, they will need broader access.

One of the coolest features in OpenAir allows you to mark subcontractor time as invoiced within the time entry view.  This feature allows you to reconcile time entered against subcontractor invoices against time entries in OpenAir and mark the time as “Invoiced” or “Paid”.  By using this feature, you can create reports to use in accrual calculations when time was entered but not yet invoiced.  This feature requires some setup but it can be powerful to help manage your subcontractors.

Cost Tracking and Addressing Different Cost Approaches

Just as you can have different modalities for engaging subcontractors, you’ll likely have different cost approaches and tracking to accommodate. Again, OpenAir’s flexibility and integration capability make it a powerful tool for managing back-office functions in these situations.

One common subcontractor billing method is hourly. Within OpenAir, you can assign a cost for the resource, just as you would for an employee. Even if you have a subcontractor that bills different rates for different projects – say, a developer that bills one rate for web application development but a higher rate for mobile application development – cost overrides in OpenAir will support that. For more information on using multiple costs for a single profile, see our webinar, Subcontractor Management Techniques in OpenAir.

If you have subcontractors billing a fixed fee, there are several ways to handle that as well. One is to allow expenses as part of the project and to add subcontractor costs as an expense.

The other leverages the OpenAir purchasing module. With this, you can create a purchase order for the project and manage the costs that way. Even better, the purchasing module integrates with financial systems, making it easier to manage vendor bills and vendor payments.

Subcontractors and Reporting in OpenAir

Of course, one of the biggest reasons to use OpenAir is the reporting available within the platform. Reporting may seem on the surface like a challenge for subcontractors when you think about their access and visibility. But again, that access can be controlled well within the profile.

As an aside, there are a few options for quickly tagging and setting access for subcontractors with profiles. One would be to add a custom field that identifies an account as a subcontractor, attaching a user type to a user record. The other is the versatile entity tag. Entity tags not only provide a lever for access and visibility control but improves reportability with subcontractors as well.

With the ability to identify a subcontractor in place, you’ll have a wide variety of reports that you can run to show the subcontractor time entry reports, available skills, and even the value of a subcontractor versus the cost to the business. Here are just a few ways that you can use reporting to look at the impact of subcontractors within your organization:

• Cost Reports
• Time Entry Reports
• Balance of employees to subcontractors on projects
• Vendor and contractor skills
• Revenue generated by subcontractors vs. employees
• Forecasted time vs. employee time vs. subcontractor time
• Forecasted costs vs. employee costs vs. subcontractor costs

Subcontractors can be a way for a professional services business to meet customers’ needs, explore new service areas, or expand offerings. However, you need ways to manage those subcontractors and all of the complexities that come with them, from billing and costs to reporting. OpenAir is a powerful tool in facilitating the back-office management of subcontractors. If you’re looking for a deeper dive into how OpenAir can help you better manage subcontractors, check out our webinar on the subject. If you have questions or need help using your OpenAir implementation to its fullest, don’t hesitate to reach out to us. Top Step’s expertise in set up, configuration, and use of OpenAir can help you get the maximum value out of your PSA investment.