In the construction industry, even companies that are not general contractors will leverage subcontractors to some degree. For example, an HVAC firm may win a contract that has some plumbing work to be done as part of it. While the HVAC firm can accomplish all of the heating and air-conditioning components of the contract, they may lack the skill set (or the bandwidth) to perform the plumbing parts of the contract. In that case, they would look for a plumbing subcontractor with a specialized skill set to fulfill that portion of the agreement.
Just like the contract that we must fulfill and bill our customer for, our subcontractor will have a similar subcontract for items they must fulfill and invoice us for. The line items can be lump sum or unit rate, just like the contract we may have with our customer.
In the same way our contract with our customer utilizes the Sales Order record in NetSuite, a subcontract uses a standard Purchase Order record as the basis for their billing. This makes sense because a Purchase Order at its core is an agreement to buy goods or services from a vendor.
¶ Understanding Subcontract Billing
When we receive bills from our subcontractor, it is likely that we'll have a detailed Schedule of Values that they will be billing us against, and it may very well be presented to us as a Pay Application in AIA-style format.
The BlueCollar Subcontract Billing Tool helps us provide an easy entry screen for those subcontracts where the AP user can see amounts previously billed, amounts held in retainage, and so on—just like our contract with our customer.
- Access the Subcontract Billing Tool page
- Select the appropriate Project
- Select the appropriate Purchase Order in the subcontract dropdown
- Note: If you do not see what you are looking for here, you will need to navigate to the Purchase Order in question, edit it, and check the BlueCollar Subcontract box
- Enter an Invoice Number, Billing Date, and Period (if applicable)
- The Invoice Number will populate the Reference No field on the Bill
- The Billing Date will populate the Date on the Bill
- Drag and drop the vendor bill document provided—it will attach to the Bill created
- Double-click into the %/Qty Billed column under This Application and enter the appropriate amount
- Click Create Bill when ready
When you are ready to bill retentions:
- Navigate back to the Subcontract Billing Tool
- Select and populate appropriate fields
- Click on the 3-dot icon next to the Create Bill button
- Click the slider to Bill Retentions
- On the lines, double-click into the %/Qty Billed column under This Application and enter the appropriate amount
- Click Create Bill when ready
Increases and decreases to a subcontract are handled through a change order process specific to subcontracts, aptly named a Subcontract Change Order.
If you haven't created a Change Order for the project yet:
- Navigate to the Change Order Management page under BlueCollar > Support
- Create a new Change Order
- Click the New Subcontract Change Request button
- Provide a Name
- Change the Date (if applicable)
- Select the applicable Purchase Order in the Related Subcontract field
- Click Save
- From the BlueCollar Subcontract Change Request page, click on the Related Subcontract link to get to the Purchase Order
- Click Edit on the PO
- Add a new line item:
- Line # needs to be an increase from the last number. If you copy a previous line, please adjust this field; otherwise, you will experience issues on the Change Request
- After selecting the item, change the Rate to the amount of the change request you intend to add
- Set remaining fields to $0: Original Units, Original Amount, Quantity, Amount
- Click Save
- When on the Subcontract Change Request, click the Subcontract tab
- Double-click into the Inc/Dec Units field and add the appropriate quantity
- If this is a lump sum item, enter 1
- Proposed Changes should automatically fill in based on the line's rate
- Click Save within the Subcontract tab
Once all changes have been entered and reviewed, approve the Subcontract Change Request to update the Purchase Order.
The following example illustrates a Subcontract Change Order for GreenScape Landscaping LLC:
Line #10: Mobilization
- Description: MOBILIZATION
- Cost Code: 01510-01 Removal
- Account: 50600 Subcontracts
- Type: Lump sum
- Original Amount: $8,000
- Proposed Change: +$2,500 for additional mobilization services required
Line #11: Clearing
- Description: CLEARING work
- Cost Code: 01510-01 Removal
- Account: 50600 Subcontracts
- Type: Unit rate (Linear Feet)
- Original Contract: $7.50 per LF × 2,100 LF = $15,750
- Proposed Change: +250 LF × $7.50 = +$1,875 for expanded scope or additional clearing work
Financial Impact: The proposed changes for these two line items total an additional $4,375.00 to the subcontractor's work, indicating an increase in costs.
For Administrators: If you require your subcontractors to submit their vendor bills within the tool, you'll need to provide them with appropriate access.
- Create a custom Vendor Center role
- Add the custom Vendor Center role to the BlueCollar Global Permissions for:
SUBCONTRACTS_BILLING_VIEWSUBCONTRACTS_BILLING_CREATE_BILL
- Create a custom Center Tab called Subcontract Billing
- Create a Category under the Center Tab also called Subcontract Billing
- Navigate to the list of Scripts
- Locate the script with ID:
customscript_bc_subcontract_r
- Click on Deployments
- Edit the deployment:
customdeploy_bc_subcontract_r_form
- Click on the Links tab
- Select:
- Vendor Center
- Subcontract Billing section
- Subcontract Billing category
- Set the Label to Subcontract Billing Tool
- Click Save