Paying a subcontractors’ invoice can be a complex job. First, it has to be ensured that the invoice doesn’t have any errors in it with regards to the timesheet submissions. Once this has been done, the next set is to authenticate payable rates, contracted hourly rate, actual hours worked and delinquency if any in reporting for work.
In a well drafted agreement between an IT staffing company and a subcontracting company every possible conflict-scenario would have been discussed and an agreement reached and signed. However, not even the best agreement can foresee all potential areas of conflict in advance. It is often resolved after discussion between the parties to the contract.
Automation for Classification
Classifying a subcontractor’s invoice is a difficult process because a lot of changes take place during the currency of a project; especially those that relate to applying the right tax rates. It is not uncommon for subcontractor-deployed consultants to leave work in the middle of an ongoing project and replace the individual with a different resource person. In a single project there can be many changes. If for example, a subcontractor deploys 10 people on a project, each domiciled in different states with different tax rates; imagine the complexity it can create in invoicing and payment processing by the IT staffing firm.
It is estimated that roughly 70% of subcontractors’ bills are wrongly classified by IT staffing firms and end up paying excess taxes than required. The chief reason why many end up with the wrong classification is that there are simply too many variables to match and too little time to do a perfect classification. Those staffing firms that get their classifications done right the first time itself are the ones that use automated invoicing and VMS software. Automating the VMS processing will ensure that the subcontractors’ invoices have been properly classified for tax purposes.
The Advantage of CONSULT in Classification
IT staffing companies use CONSULT for invoicing, classification, discount calculation, tax classification, VMS and payment finalization. CONSULT is designed to be an add-on for QuickBooks accounting software. It can be easily integrated to enhance features that are present in accounting software.
What makes CONSULT such outstanding automation software for invoicing and VMS is its sophisticated algorithm and matrices coupled with AI-driven unique technology not available in any other comparable software. The application does not require you to update data; everything is captured and processed instantly on a real-time basis. This makes it highly dependable.