Processing Subcontractor Labor

The subcontractor labor process creates expense transactions from the timecard and uses an expense invoice to pay the subcontractor.  EBMS uses an accrual payroll payable process that posts labor costs on the day the labor was performed.  The gross labor costs are posted to the EBMS financial system using the individual timecard details lines. Note that this pay is credited to the Payroll Payable account set within View > Advanced Options dialog from the timecard menu.   Unlike the typical payroll service process, the expense invoice then debits the payroll payable account.  The subcontractor labor process does not involve a 3rd party to complete the process.  Review 3rd Party Payroll Service > Overview for steps to use a 3rd party processor.


Complete the following steps to process 1099 subcontractor workers using the EBMS labor module:

  1. Create a payroll period as described in Processing Payroll > Opening a New Payroll Period. The Pay Period should reflect the last day of the payroll pay period and the Pay Date will be used as the expense invoice date.

  2. Record the optional payroll clock in/clock out times using the various options within EBMS. Review Time and Attendance > Clock In/Out Overview for more details.

  3. Enter timecard details using the various EBMS options listed below:

    1. Tasks and Work Orders:  Review Tasks > Overview

    2. MyTime app:  Review MyTime > Overview

    3. MyJobs app:  Review [Financials] MyJobs > Overview

    4. Job Costing module:  Review [Financials] Jobs > Overview

    5. Time Track app: Review Time and Attendance > Time Track App > Using Time Track

    6. MyTasks App:  Review MyTasks > Overview

    7. Timecard Entry: Review Processing Payroll > Entering Timecards

  4. Process timecards and create unprocessed expense invoices.  Complete the following steps within this dialog:

    1. Select Labor > Worker Payments from the main EBMS menu to open the Employee Payments dialog.

    2. Verify that the Payment Method for all employees listed is set to Payroll Service.

    3. Click the Select All button to process labor for all employees listed.  

    4. Click on the Process button and select Calculate Taxes (Typical) option from the button menu. Note that this step may not calculate any taxes or deductions since the subcontractor labor process does not normally involve any taxes.

    5. Click on the Process button again and select Process Payments to process the daily debit transactions to individual work codes, jobs, etc. and credit to the payroll payable account listed in the Advanced tab of each employee.  

    6. The recommended step is to click Create a new PO to create a separate invoice for each worker and pay period.  A single payment can be made for a list of separate expense invoices listing each worker or  pay period.  The pay stub will list the description of each AP invoice.  Select existing PO option only to append to an existing unprocessed expense invoice (PO).

    7. The following dialog will appear if the Create a new PO is selected:

      1. Click Yes to process all worker payment POS and mark them ready to pay

      2. Click No to create the purchase order but not process the new PO into an invoice.   Repeat the step each 1099 subcontractor worker if No is selected.  

  5. A list of expense purchase orders (a - if documents were not processed) and invoices (b - if POs were processed) will be listed as shown below:

  6. Print an optional form to generate a receipt report to list workers, hours, and pay for the pay period by completing the following steps:

    1. Launch the report menu by selecting File > Reports from the main EBMS menu.

    2. Launch the Reports > Labor > Forms > Individual Direct Deposit Notice report.

    3. Select the payroll service Payment Method option as shown above and click Print to generate the following form for each subcontract worker.  

  7. Open Expenses > Vendor Payments to view invoices.   

    Enable the Show P.O.s to show the purchase orders.

  8. Process the purchase orders AP invoices

  9. Generate payments using one of the following Payment button options:

    1. Process Check:  Review [Financials] Vendor Payments > Printing Checks for steps to generate paper checks.

    2. Process Direct Payment:  Review [Financials] Vendor Payments > Processing Direct Payments ACH for steps to pay contractors using an ACH payment.  This process is similar to the direct deposit option in payroll.

    3. Manual Payment:  Select Manual Payment from the Process button to process payments using other payment methods and record the payment information within a payment list.  

  10. Close the payroll period within EBMS by selecting Labor > Close Pay Period from the main EBMS menu.  Review the Processing Payroll > Closing Payroll Periods section for more details on this step.

  11. Review [Financials] 1099 > Printing 1099 Forms for end of year steps to generate 1099 forms.