Finance Department:
The role of financial department is huge and it records the financial transactions, manages savings, investments, and debts. Financeial Department is involved in filing Tax Return of the Staffing Firm and sometimes of employees also. The main focus of a financial department relies on the payments coming into the staffing firm i.e. Accounts Receivable and the payments sent out from the staffing firm i.e. Accounts Payable. Here in this page, we describe about Accounts Payable and Accounts Receivable related to staffing firm, client, vendor and candidates.
The following table describes the activities related to Accounts Payable and Receivable in a typical staffing firm on a contract basis.
Assumption: Staffing firm sourced the candidate from the vendor and candidate is working with the client through staffing firm.
| Accounts Payable | Accounts Receivable |
|---|---|
| Vendor sends time sheet, invoice to staffing firm | Staffing Firm gets timesheets from candidates |
| Staffing Firm matches the invoice with timesheet, MSA and SOW | Staffing Firm creates invoice and send it to the client along with timesheet |
| Staffing Firm creates payment and sends to vendor electronically or by check | Client matches the invoice with timesheet, MSA and SOW |
| Client sends payment to staffing firm electronically or by check |
The four main documents that are used in this payment process are Invoice, Time sheet, SOW (Statement of Work), and MSA (Master Service Agreement) which are explained below.
- Invoice: Refers to the bill raised against services provided.
- Time Sheet: It records the number of hours worked by the candidate with the client. When a candidate is working with the client, candidate gets signature from the client on time sheet on a weekly/bi weekly/bi monthly/monthly basis. Then, this time sheet is attached with invoice for payment purpose.
- MSA: It is an agreement, which contains the terms and conditions between
- staffing firm and vendor OR
- staffing firm and client OR
- staffing firm and candidate OR
- SOW: Usually SOW contains the staffing firm name, Title, Date of Joining, Start Date, Duration of the Project, Consulting charges, Payment Terms etc. SOW is a document between
- staffing firm and vendor OR
- staffing firm and client OR
- staffing firm and candidate OR