Eliminate the Hassles of Subcontractor Payments in Commercial Cleaning

Does your commercial cleaning company use subcontractors to perform service work?  Do you find the billing and payment process is a hassle?  Automated software may be able to save you time and headaches, as this case study shows.

Challenges of Using Subcontractor Cleaning Service Providers

When using third-party, subcontractor cleaning providers, business complexity across customer contracts, cleaning work orders, recurring service and special services can make invoicing and payments extremely challenging.

While effective for sales and revenue, the subcontractor model puts a high burden on back-office personnel to manage internal processes.  Some of the challenges are:

Problems at the Cleaning Contract Level:  If customer cleaning contracts are created and managed in a system separate from billing software, manual work is needed to ensure that cleaning work performed for a certain period is under a valid, non-expired contract.

Problems at the Workorder Level:  After service work is performed by the third-party subcontractor, if they submit an inaccurate bill or do not submit a bill in a timely manner it causes extra work and errors.  Back-office staff spend too much time making phone calls and shuffling workorder paperwork in order to generate accurate subcontractor payments.

Problems at the Area Cleaned Level:  Some customer cleaning contracts are established across a large facility, and billing to the customer as well as payment to the subcontractor is done on a square footage of area cleaned.  Calculating square footage is complex, and made even more difficult when the area cleaned is changing frequently.  Back-office staff may have to record these changes in multiple systems to ensure that the recurring invoice for the next period is reflecting the correct square footage.

Problems for Special Services:  Periodically end customers request special services such as carpet cleaning, deep cleaning on kitchen areas, or other services not included in the contract.  Billing customers for these special services can be confusing for back-office staff as some require them to be billed on a separate invoice and others require them to be billing with their normal services.

The Solution to Solving Subcontractor Billing and Payment Challenges

This case study discusses how one commercial cleaning company solved their billing and payment challenges for subcontractors using software, and services from Seidor.

Before:  Days and Days to Produce Subcontractor Billings and Payments

For commercial cleaning company Interstate Contractor Cleaning Services, rapid growth pushed them beyond the limits of their QuickBooks accounting system and customer contract management process.  The two systems had been used to generate thousands of customer invoices and subcontractor payments -- taking days to produce billings and payments.  

Subcontractor billings were complex and confusing since subcontractors are paid by the square footage of the space they service and because many office clients experience frequent tenant turnover.  These customer changes make invoice amounts fluctuate month to month, and when you add in special services it made figuring out what was owed to subcontractors extremely difficult.  

Overall, the subcontractor billing and payment process was complicated and practically impossible to manage through QuickBooks.

After:  Seidor and SAP Business One Automate for Faster Processing

To solve these challenges ICCS implemented SAP Business One software with Seidor.  Through the implementation process, the subcontractor billing and payment process was streamlined to manage the contract as well as changes and special services. 

Within the software, subcontractor agreements are defined through a projects summary that outlines what rate is due to the subcontractors performing cleaning work.  Any tenant changes or special services that impact subcontractor services are entered into the system one time.  

When end customers are billed for services performed, the system processes all the customer invoices and – at the same time - creates a payable to the subcontract vendor who performed the services for the proper amount, based on the agreement established for each customer.  In essence, as you move through the vendor accounts payable process it creates a purchase order for the correct amount due to your subcontracted vendors and create payments quickly and easily. 

Dave Seymour, Chief Financial Officer of Interstate Contractor Cleaning Services says, “The system is 100 percent better and runs like a Cadillac. The process has been smooth and easy and we haven’t had any subcontractor complaints.”

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