Problem with T&M Invoices for Subcontractor

Question

Hi everyone, I’m looking for guidance on the best way to handle T&M billing for subcontractor work in Aspire.

Our workflow is a bit different from standard in-house labor. We utilize subcontractors for certain scopes of work and track their costs using Purchase Receipts. Subcontractors do not log hours in Aspire. Instead, they provide us with total hours worked and material costs, and we bill the customer based on those T&M amounts.

When I attempt to use T&M Override billing, I receive the following error: “Material ‘Subcontractor v11’ not approved.” It seems like Aspire is expecting approved time and material entries tied to the work ticket and possibly logged labor hours in the system. In our case, there will never be time entries since the work is performed by subcontractors.

Currently, we are using Fixed Price billing, waiting for the subcontractor invoice, and then manually adjusting pricing. This works, but it adds extra steps, slows down billing, and creates inefficiencies for true T&M jobs.

Ideally, I’d like to use T&M billing for subcontractor-driven work without requiring internal time entry and be able to bill directly off subcontractor costs, including labor and materials.

Is there a recommended workflow in Aspire for handling T&M billing using subcontractors only? Can subcontractor costs entered via Purchase Receipts be used directly in T&M billing? Is this error strictly tied to unapproved material entries, or is it also due to missing time entries? Has anyone successfully implemented a T&M process without internal labor tracking?

For context, the subcontractor item is set up in our catalog, costs are entered via Purchase Receipts, work tickets are in the correct status, and the issue still persists when attempting T&M Override.

Any insight or best practices would be greatly appreciated, especially from teams that rely heavily on subcontractors. Thanks in advance.

BADV-Brady · Answer

Hello - Welcome to the community! I’ll take a crack at this - note that this will be pretty in-depth.

Step 0: Setup Validation

You’ll need:

A subcontractor item in your catalog with the following settings:
- Item Type = Sub
- Purchase Unit Cost = $1.00
- Purchase Unit = dollars
- Allocation Unit = dollars

Step 1: Create the Opportunity (under an internal property, if you want to save as a template)

Open Property → New Opportunity → “New Work Order”
On the Opp screen:
- Opp Name - up to you (something like “Sub T+M Template”)
- Select Division (can be edited on individual opps created as needed)
- **Invoice Type - T&M on Completion
- Add any T+M-specific verbiage to the Proposal Description area(s)
- Three dots (upper-right) → “Create Estimate”

Step 2: Build the Estimate

Edit “Default Group” Header (something logical, like “Subcontractor”)
Add in your service (can be a placeholder, or T+M Service - see below)
- Note that I recommend having a “T+M” service for each division or service type in your service catalog - it’s not required, but allows you to dictate the service billing settings in the template, and all they have to do when the template is used is drill into the service and update the “Display Name” to whatever you want the customer to see on the invoice
Add an Item - locate your “Subcontractor (dollars)” item discussed in step 0 above
- Qty = 1.00 is fine

Step 3: Edit Service Billing in Estimate

Drill into the service
- Verify invoice type = “T+M on Completion”
- If preferred - add any other settings you want (min charge, visit checklist, etc)
- Under Pricing Table:
  - Only “Sub” markup will matter here (because our only item will be Sub item type)
  - Enter the desired markup you want to apply to actual sub costs that hit the WT
  - Consult your tax pro if you don’t know whether you should tax passthrough (Sub) income in your state
- Upper-right → “Save”

At this point, we’ve made a viable Sub T+M template - if you’d like, you can save that template for future use:

Opp Screen → Three dots (upper-right) → “Save as Template”

Step 4: Real-World Utilization - Opportunity Creation

Open Property → New Opportunity → Locate the template that you just saved
Opp Screen:
- Update Opp Name
- Add pertinent information for this job (Start Date, etc)
- Three dots (upper-right) → Create Estimate
Estimate Screen:
- Drill into Service → Update Display Name (to what you want the customer to see on the invoice) → “Save”
- Three dots (upper-right) → “Estimate Complete”, then “Won”

Now we have a WT created with the necessary billing settings to streamline the T+M sub invoicing process

Step 5: Real-World Utilization - Purchasing/WT Management

The BIG THING to remember here: The purchase receipt MUST be Received AND Approved prior to completing the work ticket for the T&M calculation to work properly.

Create/receive/approve purchase receipt (I prefer to use Purchasing Assistant for this, to ensure the sub item matches the est. item)
- Enter pertinent info (normal PR stuff)
Complete/approve work ticket (make sure completed date > PR Approved date)

Step 6: Real-World Utilization - Invoicing

Billing is triggered by WT Completion (ie: you will see it in queue in Invoicing Assistant)
Select the line - create invoice - review - send to customer

If billing adjustments are needed:

First - uncomplete WT, recomplete using the “T&M Override” feature at the WT level (enter the amount you want the customer to be billed)
ONLY USE INVOICE ADJUSTMENTS AS A LAST RESORT
- Invoice adjustments get thrown in a generic revenue “pool” during month-end closing, which is a bear to parse out for those that close months and get journal entries in your accounting software

I hope this helps you out - feel free to reach out (Brady@B-Advisory.net) if you need any further clarification!

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