Managing Disbursements (e.g., Subcontractors, Government Fees, Searches)

Article Contents

1. Introduction
2. Setting Up Disbursements
3. Entering Disbursements
4. Reviewing Disbursements on a Project
5. Setting Up Projects for Disbursements (Including Budgets)
6. Next Steps

Introduction

Many projects involve costs that you pay on behalf of the client, such as government application fees, council plan sealing fees, title or plan searches, courier or printing costs, or subcontractor invoices. In Hiro you can record these costs as disbursements so the project shows the actual cost of delivering the work, and so the cost is available later when you prepare an invoice.

This article covers how to set up disbursements in Settings, how to enter them on a project, how to review them, and how to set up your projects so disbursements are expected. Invoicing disbursements is covered in this separate article.

Setting Up Disbursements

Hiro has two ways to classify timesheets entered:

• on a project, staff usually pick from the project’s work schedule (phase, task, subtask)

• outside of that, Hiro can classify a timesheet entry by its Kind such as non chargeable time, activity time, disbursement or mileage. 

Disbursements belong to this second group. They are a kind of timesheet entry that represents a cost, not time. To make them available, you create a work type in Settings and set its Kind to Disbursement. After that, staff can pick it whenever they need to record a cost directly.

To set up a disbursement:

1. Go to Settings > Timesheet Work Types.

2. Optionally, filter the list of existing work types in the search results to just show disbursements by selecting Disbursement in the Kind dropdown.

   

3. Adjust existing disbursement types or create new ones to suit your needs:

   • To edit an existing work type, click the edit (pencil) icon.
   • To add a new work type, click the New work type button.
     
     
     
     

4. Set the Kind field to Disbursement.

   

5. Name Your Disbursement:
   Enter a name for your disbursement in the Description box. This name will appear in the work type dropdown when entering disbursements into Timesheets.

6. Select How Disbursements Are Costed:

   • Currency amount - Enter a specific dollar amount per timesheet entry. Use this for variable costs, such as subcontractor invoices.

   • Number of units - Enter a fixed dollar amount, and specify the quantity per timesheet entry. This is ideal for items like title searches, which are always purchased at a set price.

7. Configure Number of Units (if required)
   When selecting the Number of units timesheet entry type, populate the dollar amounts:

   • Cost per unit - The amount internally recorded as an expense for the relevant project.

   • Revenue per unit - The amount charged to your client when the disbursement is attached to an invoice.

     

8. Configure Tax Rates:
   Default tax rates are applied when a disbursement is first recorded on the Timesheets page and when it is later billed on an Invoice. These rates can be overridden if needed.

   • Default cost tax rate - The tax rate initially used when creating a disbursement on the Timesheets page. This can be overridden after creation if required.

   • Default revenue tax rate - The tax rate initially used when charging a disbursement item on an invoice in the Invoices section. This can be overridden on the invoice line item if required.

     

9. Set Up Reimbursement (if needed):
   Choose if the disbursements entered in Timesheets should also be reimbursed to employees. If enabled, these amounts will be included in the Payroll Spreadsheet for the employee associated with the entry.

10. Click Save.

Entering Disbursements

You record the actual cost in the Timesheets area. This creates a WIP cost against the project so the PM can see it along with other project costs.

1. Open Timesheets.

2. Choose the date the cost was incurred.

3. On a new timesheet entry:

   1. select the project;

   2. from the work type... dropdown, select the appropriate disbursement type;

   3. enter the tax exclusive amount of the disbursement in the amount box;

   4. choose whether GST needs to be added to the disbursement amount entered during invoicing;

   5. enter a description to describe the disbursement;

   6. optionally upload the supplier invoice, council receipt or other evidence, by dragging and dropping the file over the timesheet entry.

      

Reviewing Disbursements on a Project

When viewing project information, you can review project disbursements in the Time & Costs tab. You’ll find three filtering options:

• All: Shows both time and cost entries.

• Time: Displays only time entries.

• Costs: Filters the list to show just disbursements and mileage.

Click on Costs to streamline your view and focus solely on the disbursements you need to review.

Setting Up Projects for Disbursements (Including Budgets)

Incorporating disbursements, such as subcontractor fees, into your project budget can be done in different ways depending on your preferences:

• Pre-provisioning a disbursement in advance:
  If you want to include the disbursement (e.g., a subcontractor’s cost) as part of your project budget from the outset, you can provision a subtask in the Work Schedule. In this case, the disbursement is reflected as part of your budget breakdown, giving you full visibility of the cost.
  
  When you raise a project invoice, you can reallocate the disbursement cost onto your disbursement subtask. You will have the opportunity to add any markup required to the disbursement subtask after reallocating during invoicing.

• Charging a disbursement directly:
  Alternatively, you don’t need to pre-provision the disbursement in the Work Schedule. You can enter a disbursement at any time via Timesheets and thereafter charge it directly on the project. Hiro allows you to manage disbursements on the go without having to allocate them upfront.

• Consolidating a disbursement within an existing subtask:
  If you prefer not to show the disbursement as a separate line item to the client, you can allocate it to an existing subtask in your Work Schedule.
  
  For example, if your client is being charged for a "Town Planning Development Application", which incorporates traffic advice provided by a third-party consultant, you can consolidate the disbursement (e.g., consultant fees) into the subtask for the application. The client will only see one total amount for the application, with the third-party costs incorporated discreetly into the overall figure.

Work Schedules are created on a per-project basis and help break down your project’s fee structure into phases, tasks, and subtasks, if needed. For a more detailed overview of Work Schedules, refer to our article, What is a Work Schedule?.

You can add a Work Schedule when initially lodging a project or update it later via the Edit Project Details page.

Next Steps

• To invoice a disbursement or fold it into another invoice line, see the separate Invoicing Disbursements article.

• To understand how reallocating or writing off costs inside an invoice affects WIP, use Reallocate or Write Off WIP Costs from Invoice Lines.