From time sheet to invoice: Business Central for staffing agencies

Time capture and billing in Business Central for staffing agencies

The core cycle is easy to state but hard to run cleanly. A worker submits time. The client approves it. Payroll pays the worker. Then the agency bills the client. Every assignment has a pay rate and a bill rate, often with overtime, holiday and shift types.

We model workers as resources and assignments as projects under the client. Approved time posts with both cost and price. It can come from a time tool or from Business Central time sheets. Then invoices are made in a batch. They group by client, purchase order or cost center, as each client needs.

Gross margin by placement, client and recruiter

A staffing firm lives on the gap between bill and pay. Payroll taxes, workers' compensation and benefits come off that gap. We apply burden rates by state and job class as an added cost on each entry. So the margin you see is after burden. It is not a flattering gross figure.

Dimensions for branch, recruiter, account manager, client and job type sit on every entry. So owners can ask which clients pay well after burden. They can ask which recruiters place the best-margin work. They can also see where a rate rise is overdue. Recruiter commission sums draw on the same data.

Payroll and funding for staffing agencies

Payroll for temporary workers runs in a payroll service or a staffing platform. Business Central has no US payroll engine as standard. After each run, a journal posts wages, taxes and deductions by branch. Then net pay clears against the bank.

Some agencies fund payroll through a credit line. Others sell invoices to a funding firm. Those moves need steady records. So we set up accounts and a posting routine for advances, reserves and fees. We also build a cash flow forecast. It lines up payroll dates against expected client payments.

Direct-hire fees and contract conversions

Permanent placement fees are billed when the candidate starts. They are usually a share of starting pay. A sales invoice with recruiter and client dimensions records the fee. Some deals have a refund or replacement period. For those, you can book a provision and release it when the period ends.

Contract-to-hire deals mix both models. First you bill by the hour. Then a conversion fee applies, often on a sliding scale. The assignment record holds the agreed scale. So nobody forgets the fee when the client hires the worker. Statement-of-work jobs with milestones use project billing instead.

Connecting the applicant tracking system

Recruiters work in an applicant tracking system all day. When a placement is made there, the client, worker, rates and dates should reach Business Central. Nobody should retype them. We build that link through the API. The tracking system stays the master for placements and rates.

Large clients often ask for invoices through a vendor portal in a set format. So we prepare export layouts or electronic documents that match. We record portal fees as a deduction. Collections staff then see aging by client. Each invoice has its approved time sheet attached.

Business Central for staffing agencies: answers

Does Business Central for staffing agencies run payroll for temporary workers?

Not in the United States as a standard feature. A payroll provider or a staffing platform handles payroll. Then the results post to Business Central. So the ledger always shows the true cost of each placement. Your finance team can then check wages against billed hours. We set up the import. So wages and taxes land by branch without typing. Your payroll team keeps the tool it knows.

Can Business Central for staffing agencies make invoices in each client's layout?

Yes. You can assign report layouts to each customer. So one client gets a line per worker per day. Another gets a summary per purchase order. Time sheet copies can attach by themselves. Also, simple layout changes can be made in Word or Excel. So a new client with odd needs does not mean new code. That keeps billing fast and cheap to change.

How do we handle different pay and bill rates per assignment?

You can set resource prices and costs for each project, which matches an assignment. Work types cover overtime and holiday rates. When time posts, Business Central picks the matching cost and price. So payroll cost and invoice amount stay in step. Then a rate change on one assignment never leaks into another. Also, a late rate rise can apply from a set date.

Do we still need front-office software with Business Central for staffing agencies?

Usually, yes. Sourcing candidates, tracking applicants and managing recruiter work sit outside Business Central. It takes over once a placement is confirmed. Some firms use Dynamics 365 Sales for client development. That links to Business Central through Dataverse. So client details stay the same in both. Then a new client set up in sales is ready for billing at once. We walk through your current setup first. Then we show how Business Central for staffing agencies would handle each case.

Can branches be compared fairly in Business Central for staffing agencies?

Yes. Branch is a dimension. Shared costs are allocated by an agreed driver. So each branch has its own statement. Allocation accounts spread corporate costs the same way each period. Then branch managers see one method applied every time. So they trust the numbers. Also, owners can compare branches without long debates about the split. We also agree on the allocation method with your owners. That way, nobody argues about the split later.

Useful next pages for staffing firms

Time sheets, resources and the payroll link are the three building blocks of Business Central for staffing agencies. Each has its own page. Also, consulting-style firms should look at the professional services page. For the product detail, see Business Central documentation on Microsoft Learn.