Timesheets in contingent labor – why are they so hard to manage?

The beauty in a properly managed flexible workforce is of course its added value to the core business. Flexibility in cost; more leverage of Knowledge; enhanced capabilities planning; all examples of its upside. But everyone knows that there are always also downsides to every upside. We have to be honest, in all the administrative difficulty around flex, timesheets in contingent labor are among the most challanging of issues.

The basics of time registration

When you are in a ‘time & material’ driven delivery schedule (i.e. Temp Labor, IT Consulting, interim management) then the simple fact that you have spent an hour for a client, means that this hour should find it’s way to an invoice and to a settled amount of money. Worked hours flow one way, money flows in the opposite direction as payment for that value. The moment money is transferred between companies though, all sorts of (international) tax laws require both the client and the supplier to be aware of the valid reason why that money was transferred. So basically this requires both parties to know weather that hour was indeed worked by the hired resource. Hence: time registration by the resource itself as a valid basis for the invoice.
In a very simple case of settling this requirement, this “time registration by the resource itself” is done via a phonecall to it’s administrator. He/she puts the amount on the invoice which is sent over to the client who considers that a valid declaration. In way more complicated cases, both client and supplier have internal procedures, processes and systems in place to get this managed.

Procedures, processes and systems? That sounds like an accident waiting to happen!

Of course this is where things go wrong. Complex organizations have the most issues in handling time registration, and thus contingent labor invoices. Let alone when both client and supplier are a large organization. When the hired resource is asked to register time in both an internal system (from the supplier) and an external system (controlled by the client) that means that two processes are kicked off that are supposed to converge again somewhere in time when the invoice is issued.

What could possibly go wrong?
• The resource can forget to post one of the two timesheets
• A workflow can linger on one side and flow freely on the other
• A workflow can recall a timesheet and get it changed, which one might forget to align in the other system
• The resource can start out with a simple type-o in one of two systems from which an invoice delta occurs
• …and we can go on for a while…

So? Any advice here?

Make sure you talk about the same data. And the only way to do that is to make sure that there is only one dataset. Integrate your processes, especially in this critical day-to-day process for contingent labor. We do not really care if you follow the clients or suppliers system or pay a third party together to objectively manage this. We do care that you collaborate in contingent labor to make sure value flows freely!

Leave a Reply

Your email address will not be published. Required fields are marked *