30th October 2013
Accounting for subcontractors; what they need to know
The construction industry relies on subcontractor labour, and ensuring that your firm manages its subcontractors appropriately and effectively is crucial if you are to achieve success down the line. How much accounts information should your subcontractors have access to, and how do you limit that access?
Your construction accounting processes will likely involve taking steps to keep your subcontractors safe, happy, paid and compliant, but what are these processes, and how many of them should your subcontractors be made aware of? Different construction accounts management software programs will allow your subcontractors various degrees of access to your accounting processes, although you may feel that it pays to keep some of them confidential. We’ve compiled a short guide to help explain your subcontractor accounts processes and indicate whether or not you should keep your subcontractors informed.
The Construction Industry Scheme has introduced a new layer of legislation and regulation to subcontractor management, and in order to remain compliant in the eyes of the government and industry regulators, there’s a lot you need to bear in mind. Compiling timesheets, retaining contact details, monitoring performance and scheduling payment can be a handful at the best of times, but especially so when you take into account HMRC reporting, too. It’s important that your construction firm utilises a construction software system that helps to streamline the above processes, but also provides the appropriate levels of access to your team and your subcontractors. While it’s important that site managers are granted access to all subcontractor management details available, the subcontractors themselves need only access their own timesheets and payment information via your construction software.
Applications and retentions
Applications and retentions are important when it comes to ensuring that your subcontractors are paid the appropriate sums at the required time. Subcontractors will apply for payment once their work has been completed according to the terms of their contract, but this application will need to be retained for the time being while you determine whether the work has been performed to the required standard. You can set the terms of a retention to release funds after a certain period, by which time both yourself and your subcontractors should be satisfied that the contract has been fulfilled. It’s important that applications and retentions are made visible to both managers and subcontractors, with transparency guaranteeing that there will be no confusion or misunderstanding.
Construction accounts management software can help to perform all of the above processes quickly and easily, but it’s also important in that it allows you to control who has access to what information at any given time. There are some details that you’ll want your subcontractors to know and others that it would be more sensible to keep under wraps; still more will be governed by rules and legislation. When using our construction software, you’ll be given the power to set user permissions for all of the employees in your firm, from subcontractors to senior management. That way, you’ll always be guaranteed the peace of mind that no-one is being allowed access to something they shouldn't see.
Our construction accounts management software solutions can offer you intuitive, powerful control over your subcontractor management processes, so why not contact us today to find out more about how we can help?
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