Outsourcing and Disbursements with Xero Practice Manager: Capturing Outsourced Services Provider Fees

This article is an extract from the book 'Everything you need to know about Xero Practice Manager'
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When running jobs in XPM, we have two types of costs. We have time costs, which are created by time sheets against tasks on a job, and we have disbursements. Disbursements are any cost associated with completing the job that is not a time sheet. Disbursements are also known as costs in XPM. These costs could be from subcontractors that do not do time sheets, outsourcing fees, and any general disbursements such as Xero subscription fees. In this section we’ll be covering how to manage each type, and the considerations you need to make.

Capturing outsourced service provider fees

Each month we are likely to receive a fixed-value invoice from our outsourced service provider. These invoices can be entered directly into your Xero and paid as they arrive. This is because we will be accounting for the actual cost on each job separately. We do not need to add these invoices as ‘Purchase Orders’ to your XPM.

As jobs are completed throughout the year, part of our job close-out process will be to recognise the estimated outsourced cost as an actual cost. This was covered in detail in Chapter 8: Project Management.

To mark an estimated cost on a job as an actual cost:

1. Job > ‘Costs’
2. Tick the checkbox next to the estimated cost for outsourced services to identify it as an actual cost.

Checking this cost as actual will spike our WIP balance by the billable amount of the cost, which we will immediately wash-up when we close the job. This was covered in detail in Chapter 8: Project Management.

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