Bill Consultant Expense as Labor

You may want to have consultant expense appear as labor expense on a project's invoices.

To bill consultant expense as labor:

1. In the Employees hub, set up a new employee to represent the consultant.
2. Enter a zero job cost rate for the employee on the Accounting tab (in the desktop application) so that the timesheets entered by this employee will not be costed to projects.
3. Modify any relevant billing rate tables to include this new employee with an hourly billing rate. You cannot use the Rate times multiplier method as the labor method because of the zero cost rate entered in step 2.
4. Create a direct expense account (in the 600 range in the standard chart of accounts) that will be used solely for this consultant work.

   Post all invoices for the consultant to this account. Because this is a direct expense account, amounts will not flow through as billable expenses to the client invoice.

5. Enter the direct expense account into an Expense Accounts Table, with an override multiplier of zero.
6. Assign this table as the rate table for your project on the Labor tab of the project's Billing Terms form. This step will ensure that project reports run at billing rates will not include billing amounts with your labor and expenses.
7. Enter and post timesheets for the hours worked by this consultant, charging the appropriate projects. A zero amount will be costed to the projects at cost rates. However, a billing amount will appear to be billed.
8. When you receive an invoice from the vendor for the consultant's time, enter it into the Transaction Center as a payable to the direct expense account. Post the transaction. This step will record the consultant expense as an expense, but will not create a billing amount on the invoice.
9. Create a client invoice to bill the consultant expense as labor.

The client invoice displays the timesheet hours posted in step 7 at billing rates in the labor detail section of the invoice. Nothing appears for the expense item. A project report at cost rates displays the hours without a billing extension in the Labor section and displays the expense in the Expense section.