Accountants must take subcontractor invoice processing seriously because it is a high-potential revenue leak point for IT staffing firms that hire subcontractors for talents that are not available within its rolls. Sometimes customers may have a demand for a high-skill individual that only specialized subcontractors can provide.

As the principal vendor of consultants to customers, it will be obligatory on your part sometimes to do some talent hunting through a subcontractor even though it may not be your usual business model of doing business. Subcontractors like your consultants raise an invoice on terms and conditions that have been agreed upon in a contract.

It is important to note that there is a vast difference between direct vending consultants and subcontracting firms. The subcontracting firm is often a business like your own – is registered in one or more states, has a business address and is legally capable of contracting as a company. There are of course a few subtle differences between a direct consultant and consultant contracted from a subcontracting staffing firm and provided to a customer.

Here are 5 common mistakes that many IT staffing company’s accountants make when they process subcontractors’ bills; they are mostly avoidable. If your accounts department is using CONSULT’s VMS (vendor management system), you don’t even have to care about the mistakes; the built-in algorithm will ensure that mistakes don’t happen at all.

• Failing to crosscheck subcontractors’ timesheet with customers’ and your own firm’s records: There many errors that can happen in a timesheet: days worked, hours spent, hourly rate and missed timesheets. If you’re still working with manual invoice processing for vendor bills, chances are you will miss many discrepancies and mistakes will pass as genuine. In CONSULT it is practically impossible to miss an error because the whole process is under the control of software.
  
• Failing to verify whether subcontractors have applied correct categorizations with appropriate tax rates and passing it for payment: Applying the right tax rates even within a single subcontractor’s bill can be tricky, when the subcontractor is register in a different state from that of the customer and each of the consultant come different states. Considering that accountants will be cross checking hundreds of entries in a single bill, the possibility of applying a wrong tax rate is really high. CONSULT has a sophisticated algorithm that will prevent wrong tax rates and save money for the staffing company.
  
• Approving subcontracting invoices without cross checking with contracted rates is again a potential trouble spot that should be avoided at all cost. Even if it means spending more time on invoice processing, cross checking should be made a regular procedure to ensure that excess payment is not made. If you are using CONSULT VMS, this step may not be essential; it will be done automatically and then validated to avoid losses.
  
• Avoid using a standalone accounting software; go for QuickBooks integrated with CONSULT’s VMS and Invoicing application. CONSULT is made specially QuickBooks and is used after the two are integrated. This enhances the power of the accounting software and increases productivity 4 to 6 times compared with manual processing.
  
• Don’t fail to make optimal use of CONSULT VMS; it offers invoicing, email invoice dispatches, timesheet management, A/R processing and QuickBooks integration and more features that cut down operational costs by up to 80%.

CONSULT is a price-effective solution that costs as little as $1/Invoice – experience it to believe!