Outsourcing and Disbursements with Xero Practice Manager: Outsourcing vs Subcontracting

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.

Outsourcing vs subcontracting

Outsourcing, subcontracting and offshoring are all used interchangeably to describe people who work on jobs for your clients, who are not on your payroll. Whether you’ve engaged an outsourced service provider, or a team of subcontractors, these people are likely to be performing the routine tasks on your jobs. This leaves the higher-value services to be performed locally by your team.

There are many benefits to this, including:

• Leveraging your team’s time
• Scalable access to skills and resources
• The ability to make higher margins on jobs
• The ability to price your services more competitively
• The ability to focus on higher-value activities for your customers
• Committing to fewer full-time staff
• Keeping overheads lower
• Plus many more.

There are, however, subtle differences between outsourced services and subcontractors, and the way we need to treat them in XPM. These will be covered in the following articles.

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