How to Manage Subcontractor Compliance in Sage 300 CRE

Sep 22, 2015

 

Holding Subcontractors Accountable

Subcontractor Compliance matters for many reasons including meeting legal requirements on jobs, keeping people safe, maintaining standards, and most important keeping customer satisfaction at a high level.

Not only do you want to make sure your subcontractors are meeting safety codes and legal service requirements, you also want to ensure your customers each receive the same quality experience every time they work with you. If your subcontractors are under-performing or failing to take advantage of their time onsite, it reflects poorly on your company.

Customer satisfaction is arguably the most important measurement of a strong service organization. By demanding consistent, quality service from subcontractors by holding them accountable, you’ll make sure you exceed customer expectations every time instead of just hoping your team of subcontractors follows your guidelines.

In this article, we’ll walk you through features and settings in Sage 300 Construction and Real Estate (CRE) software that make it easy for you to manage compliance and hold subcontractors accountable.

Subcontractor Compliance Setup

Sage 300 CRE (formerly “Timberline Office Software“) software manages all aspects of the subcontractor relationship, from waivers and insurance certifications to certified payrolls and much more, while integrating within the business processes of your organization.

When you set up a Subcontract (Commitment) in Sage 300 CRE Timberline (JC) Job Cost or (PJ) Project Management that involves the vendor, the software will automatically create the miscellaneous compliance items for the vendor and associate them with the job.

Sage 300 AP Compliance Settings

When the vendor sends you the paperwork for the job, you “receive” it in Subcontractor Compliance Management. Select the Job, the Vendor and under the Misc. Tab, Job sub Tab, locate the item, click the “Received” check box and enter the details for this item.

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Note:  you can also manually add items for the Vendor for this job in the Subcontractor Compliance Management screen as needed.  Just make sure you have selected the correct Job and Vendor at the top of the screen.

Setting Up Job-Specific Misc. Compliance Items

These types of items are only required when the vendor is involved in specific jobs you need to use the ‘Jurisdiction Field’ in conjunction with the Misc Compliance Items. The Jurisdiction list is completely customizable to meet your company’s needs.

To set up jurisdictions go to File > Company Settings > Custom Descriptions > AP Jurisdiction.

This list may identify States, Counties, Locales, or even specific types of Jobs such as Schools or Government agencies that have a list of specific requirements.  You can even change the name “Jurisdiction” if desired to have this field make sense for your business needs.

Sage 300 CRE Custom Jurisdictions

When you add the misc. compliance item to the Vendor click the “Required on Job” box and indicate the “Jurisdiction” for which it is required.  This tells the software that this item is only required on Jobs with a matching Jurisdiction.

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In the Job set up, go to the Job Compliance tab and select the Jurisdiction.

Sage 300 Construction Job Setup

When you set up a commitment for a vendor for a job with a corresponding Jurisdiction, the software will automatically create the Misc. Compliance Items associated with the job.

In the Subcontractor Compliance Management you can see the Compliance Items that the vendor is required to turn in for a specific job.  Select the correct Job and Vendor, click on the Misc. Tab, Job sub Tab and you can view the require items for the Job and Specific Jurisdiction.

Subcontractor Compliance Management Sage 300

Final Compliance

Some documentation is only required when the job is done.

For example, say a Punch list is only completed when the subcontractor’s work is done. But you need proof from the field that the work is satisfactory before releasing final payment to the vendor. You release the final payment only when all the compliance items have been turned in.

For instance, you may hold 10% retainage on your subcontract until the work is done and only release it when the work is approved and all documents verified. You need to make sure Accounts Payable does not release the final payment until everything is approved.

In the Vendor Set up, select the Vendor Type, ie. Subcontractor.  (Vendor Types can be modified in Custom Descriptions to meet your needs.)

Vendor Setup Final Compliance

On the Compliance tab, select the Misc. Compliance Item to track.  If the item is only due when the subcontractor finishes the job, select the check box “Required for Final Compliance”.  The software will generate a warning if the item is still outstanding.

Sage 300 Vendor Screen

In the Job Set up, Job Compliance Tab you specify which “vendor types” are subject to Final Compliance Approval and the Final Compliance Approval % (example: 10%).  Only commitments with these vendor types are subject to Final Approval.

Sage 300 Job Compliance Setup

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Next, you set up the commitment for the vendor for the job.  The Commitment associates the Vendor with the Job.  The software will only allow payments to the vendor up to 90% of the revised contract price.  In order to release Final Payment:

  1. All Compliance items must be received
  2. Mark the Commitment as Final Compliance Approved

Sage 300 Final Compliance Approval

Note:  The “Final Compliance Approval button is only visible to authorized users (those with proper security permissions)

If the “Final Compliance Approval” button is not checked and you try to pay the remainder of the commitment, the system will not cut the check.  The check journal will show that the Final Compliance Approval is required.

In addition, if you try to mark the Final Compliance Approval button and there are still outstanding compliance items for this vendor, the software will generate a warning “you cannot mark Final Compliance Approval until all outstanding items are received”.

Final Compliance Approval

Sage 300 CRE Final Compliance Message

Use the Subcontractor Compliance Management to receive these items.  You cannot use the “Override” check box in place of the “Received” check box.  After all items are received, you can now check the Final Compliance Approval button in the commitment and then generate the final payment to the vendor.

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