Using the Subcontract Ledger (SL) Module

Overview:

The Subcontract Ledger module in Vista is a prime way of handling subcontracts for each job created in JC in Vista.

Subcontracts work with other accounting modules to monitor progress of subcontracts per job

Create subcontracts in SL module OR create subcontracts in PM module and then interface with SL module using PM Interface

SL interacts with AP Module for invoicing and payments to subs

SL interacts with JC to track committed costs

Subcontract numbers can be created however it works best with the client (also can auto-generate numbers)

4 types of subcontract items

1. Regular

• Original line items of the subcontract
• Must be an item for each phase of work that is affected
• Items affect both original and current totals in SL and in committed costs in JC 
• Can be set up in PM and interfaced

2. Change order Items

• Used when a CO is to be recorded, invoiced, and otherwise tracked as a separate item from original items
• Items affect a subcontract's current totals in SL and committed costs in JC
• Can be set up in PM and interfaced

3. Back charges

• Used to record items to be charged back to the subcontractor but not part of the subcontract
• EXAMPLE: Sub broke a water line on job, so a backcharge will reduce what we pay them for the subcontract
• Does NOT affect original or current totals, only affect net invoiced totals in SL

4. Add-ons

• Similar to Regular items but tracked separately
• Typically used to track things like bonds, dues, and others that are to be deducted from the subcontract
• Items affect original, current, and invoiced costs in SL and committed costs in JC

Subcontract items are updated to JC as committed costs

the total value of a subcontract (including COs and backcharges) impacts Total and Remaining Committed Costs

as AP invoices get posted to the subcontract, Remaining Committed Costs are reduced

Directions: 

Before we can even create AP invoices for a subcontract for a job, we must create the subcontract first. This is done in Subcontract Ledger > Programs > SL Subcontract Entry.

1. Fill out all necessary fields in the header portion of the Subcontract Entry form and save the form.
2. OPTIONAL: Use the Hold Code field to automatically apply hold codes to all AP invoices created from the subcontract (such as a Pay When Paid code). I  
3. Then, add all necessary line items to the subcontract, per the subcontract agreement documentation. Each item must be linked to a phase of the job. 
4. Choose the UM (unit of measure) of the items to be provided. If other than LS, also fill in the original units and unit cost. 
5. Then enter any necessary retainage percentages applicable. 
6. Choose the tax type and code that will be used to determine the tax amount for each invoice created for this subcontractor.
7. When all is good, process the batch.

An example of a subcontract in Vista:

Now that our subcontracts have been set up, we can review the job and see how it is affecting our costs (in this example there are two subcontracts, the one above and one for $30,000):

Now we wait for the job to begin, and for the first billing to be sent out to the customer for progress completion on the job (or, for a "mobilization" billing to cover costs as the job begins). 

TIP: If we are a general contractor on the job and we can't expect to overbill on the job, but rather wait for certain subcontractors to bill us so we can bill our customer, it is strongly recommended that we use the Pay When Paid hold codes for the AP invoices received, as they will be "on hold" until we've billed out and received back the cash for the billing.

If we want to initialize our "pay when paid" subcontractors when a progress billing gets sent to the customer (i.e. gets posted in Vista) we must make sure this box is checked for each contract item we want to be initialized from:

Now for the fun stuff.....

After we've created a new JB Progress Billing in Vista, we will now be wanting to generate our pay when paid subcontractor invoices. This is where we bring in the mighty SL Worksheet.

This is what comes up next. Fill in all applicable fields as necessary, then click Update:

Use the "Use Job Billing to initialize invoice amounts" checkbox to initialize subcontracts based off of the percentage billed in JB Progress Billing. Leaving the box unchecked will bring the subcontracts with $0.00 as the amounts. 

Confirmation that Vista found subcontracts to initialize:

If the SL Worksheet comes up with no further information (blank), you must also fill in the proper Job in the header portion of the worksheet:

Make sure to go to the Info tab and fill in each subcontracts invoice (make sure to fill in the AP Reference field to prevent duplicates): 

Then we must simply fill in the line item portion for each subcontractor for whom we are expecting to receive or have received a billing from:

Once our billing amounts have been entered in, and if everything looks good, check the "Ready" checkbox in the header portion of the SL Worksheet window. Now we can send these subcontractor invoices over to A/P where they can be paid via a check or EFT. 

First, go back to File > SL Payment to AP Preview to review what's going to be updated to A/P as one final check.

Then, under File > Update to Accounts Payable > choose one of the two options:

In the SL Update to AP dialogue box, fill in any applicable options necessary to select and filter what gets updated to AP:

We now have a new AP batch created, in this example it was sent to the AP Transaction Entry program. From here, we can open the batch, look things over and make any necessary changes as needed. If all looks good, validate and post the batch.