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Truly Making Contingent Workers Work for You

I remember several years ago (too many to mention) in one of my former careers (once again too many to mention) at a marine construction facility, we had to bring in a large number of contingent workers to supplement our workforce in order to meet project deadlines.  As you can well imagine this introduced the same issues anyone else has faced when contingent workers are employed – chasing timesheets, reconciling vendor invoices with hours booked to the project, dealing with vendor questions in regard to payments, and many others that are too numerous to mention.  I can remember many a day thinking there’s got to be a better way.  Good News!  There is.

The Contingent Worker functionality available from Oracle allows you the ability to setup contingent workers as sub-contract employees in the HR system.  Thus, allowing them to enter time in OTL.  The integration with Oracle Projects allows these transactions to be interfaced as labor transactions rather than supplier invoice transactions.  In addition, you may also implement additional AutoAccounting rules to derive further detailed accounting for these transactions.  PO/AP integration allows for the automatic generation of receipts based upon approved timecards and additionally, allows for the automatic creation of supplier invoices.

As far back as Family Pack M for Oracle Projects Contingent Worker functionality has been in place.  And with the current release Oracle has made the functionality more robust, however, there still seems to be quite a number of basic questions as to how the functionality works and that’s what we’ll focus on today.

What are the advantages of implementing the Contingent Worker functionality? – There are several advantages to implementing this functionality

  • Invoice Reconciliation
    • By implementing Electronic Receipt Settlement (ERS) for your contingent worker vendors you can eliminate the tedious effort of reconciling vendor invoices to hours recorded to a project.  With ERS vendor invoices are automatically created based upon the approved timesheets for their contingent workers
  • Project Billing
    • By interfacing the contingent worker transactions as labor transactions to Projects, contingent workers can be billed the same as employees, thus eliminating any issues with converting vendor dollars to labor hours.
  • Project Performance
    • With contingent worker transactions processed as labor you will gain the benefits of being able to track all labor hours on the project against budget.  This will aid in the development of more accurate forecasts.
    • In addition, you will also be able to maintain a historical record of all labor charges for future bids and proposals.

Do we have to implement Accrue on Receipt functionality for the Contingent Worker functionality to work? – In a word, no.  The only thing that needs to be done is to make sure the matching level is set to three-way and the supplier is Pay on Receipt for the purchase order for the services.

What are the options for controlling the transactions and accounting for Contingent Worker transactions? On the Costing tab of the System Implementation Options form you can select whether or not you want to import Contingent Worker transactions. This option will determine whether or not the costs are viewed in projects as labor transactions or as supplier invoice transactions.  In addition, you can also select whether or not you want to interface the Contingent Worker transactions from Projects to GL.  If this option is checked you will need to take into consideration the fact that the accounting lines from AP will post to GL and you do not want to double post the transactions.  As an example, your accounting from AP would look like the following:

  • DR = Expense
  • CR = AP Liability

While the accounting from Projects for the Contingent Worker labor could look something like this:

  • DR = Job Cost
  • CR = Expense (Same as account above)

Are remaining Purchase Order balances stored as Commitments? – As a matter of fact they are and depending upon your method of importing the costs to projects the commitments are relieved.

What types of adjustments are available in for Contingent Worker transactions? The standard adjustments in Oracle Projects (Transfers, Splits, etc.) are available to use as with standard labor transactions.  In addition, options can be set in OTL to allow for the timecards to be adjusted even though it has already been approved.

Thoughts on “Truly Making Contingent Workers Work for You”

  1. Hi Bruce,
    Simply a huge Thanks ! You have just answered some questions I wonder for a while especially with the last part of your explanation, about accounting purpose and eventually the double post if we do’t take care about accounting entries.

  2. Kudos! for such a well written article. I guess only person who is thorugh with Projects and good accounting background can write in this manner. The presentation format tells me that Bruce is a true professional who can express ideas clearly to business – SME.
    I am full of appreciation for Bruce and would encourgae articlees of this level.
    My favorite next topic will be Inter Company Billing in Oracle Projects.

  3. Oh my goodness! an amazing article dude. Thank you However I am experiencing issue with ur rss feed . Don’t know why Unable to subscribe to it. Is there anyone getting identical rss problem? Anyone who knows kindly respond. Thnkx

  4. Bruce Maghan Post author

    Hi George,

    Thanks for the feedback. Unfortunately, at this time the RSS feed is down because our blog pages are being worked on. As soon as they have the issue resolved I’ll let you know and you should be able to subscribe to the RSS feed. Until then I’ll keep launching my posts out to LinedIn.

    Thanks Again,
    Bruce Maghan

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Bruce Maghan

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