Skip to Content
Product Information

Hiring Contingent Workers using SAP Business ByDesign

Contingent Workers are a workers with a short-time relationship with your company, it can be freelancers, independent contractors or consultants hired in on a temporary basis. These workers may fill in for absences, add capacity during seasonal peaks or can be experts needed in projects. Typically, they are hired in on an hourly and/or daily rate and is payed based on worked hours. SAP Business ByDesign has good built in functionality for handling of contingent workers.

In this blog I will describe this process. I will cover

  • Preparation of Master Data (Supplier, Service Agent, Service and Sourcing Contract)
  • Creating Projects (With Work Assignment and Purchase Requests)
  • Service Agent’s Time Recording and Project Manager’s Approval
  • Automatic Invoicing based on ERS (Evaluated Receipt Settlement)

The process is shown in the below diagram.

Figure 1 The handling of Contingent Workers Process

Required Master Data

In Business ByDesign Contingent Workers are called Service Agents. A Service Agent is employed in an organization that in Business ByDesign will be handled as a Supplier. (If the Service Agent is Self-employed you need to make a supplier in Business ByDesign and assign the Service Agent to this Supplier)

In this example I have made a Supplier with 2 Service Agents as shown below.

 

Figure%202%20Supplier%20with%20Service%20Agents

Figure 2 Supplier with Service Agents

Since the Service Agents are going to report hours in SAP Business ByDesign I Request a user for the Service Agent. This user will have a license effect but be aware it is only Self-Service User that is needed. It is possible to let the project manager maintaining the Time Sheets of the Service Agents but then you add unnecessary work to a Project Manager.

Figure%203%20Request%20User%20for%20Service%20Agent

Figure 3 Request User for Service Agent

To be able to make Time Sheets a Service is needed in the system. I have made a Service called “Blog Consultancy” that will be used by the Service Agent.

Figure%204%A0%20Service%20to%20be%20used%20by%20the%20Service%20Agent%20on%20Time%20Sheets

Figure 4  Service to be used by the Service Agent on Time Sheets

Now we have a Supplier, we have Service Agents and we have Services. Next step is to make a Sourcing Contract with the Supplier. When you make a contract, the contract is used by the Source Determination Engine and it simplifies the purchasing process.

In the contract you maintain:

  • The Services to be delivered (in our case Blog Consultancy),
  • Target Quantity or Amount,
  • The price of the service.

This is shown below.

Figure%205%20Sourcing%20Contract%20for%20Service%20Blog%20Consultancy

Figure 5 Sourcing Contract for Service Blog Consultancy

To simplify the process for Supplier Invoices you should maintain Goods and Service Receipt Expected (The approved Time Sheets cover this), don’t Expect Invoice and tick the Evaluated Receipt Settlement (ERS) box. Based on this you can make invoicing runs that do the Invoicing automatically based on approved Time Sheets.

Project Management

Now I have a contract with “Hoset Consulting” on delivering the Service “Blog Consultancy” for the price of 910 NOK per hour.  The supplier has 2 Service Agents that I can use.

To hire one of these Service Agents I will use a Project, the Project can either be a Cost Collecting Project (for internal cost) or it can be a Customer Project where I need to use the Service Agents as  experts on a delivery project. The “hiring” process (procurement) will be the same independent of the project type. In this example a Cost Collecting project is used.

In the Project I assign Penny Hansen to work 16 hours on the Blog Consultancy Service as shown below.

Figure%206%A0%20Assigning%20work%20and%20Service%20Agent%20to%20the%20Project

Figure 6  Assigning work and Service Agent to the Project

After releasing the project, I go to Products and “Creates Purchase Request for Service Suppliers”. Based on the Sourcing Contract, a Purchase Order is created, and the Worklist of Penny Hansen’s Time Sheets will be updated.

Figure%207%20Create%20Purchase%20Orders%20for%20the%20Services

Figure 7 Create Purchase Orders for the Services

The Purchase Order is sent to the Supplier and has references to the Project and to the Sourcing Contract as shown below.

Figure%208%20Purchase%20Order%20as%20sent%20to%20Supplier

Figure 8 Purchase Order as sent to Supplier

 

Time recording and Approval

Our hired Service Agent can now start working at the project and use SAP Business ByDesign to report hours. As you see below, the Worklist is updated with the Project Task, Service and Purchase Order. The Service Agent can report time and Release the Time Recording.

Figure%209%20Service%20Agents%20Time%20Sheet%20with%20Worklist

Figure 9 Service Agents Time Sheet with Worklist

Since it is a Service Agent the Time Sheets must also be approved by the Project Manager. The Project Manager opens the “Approvals: Time Recordings” and approves the Time Sheets.

Figure%2010%20Approval%20of%20Time%20Sheets

Figure 10 Approval of Time Sheets

Invoicing

As mentioned earlier, Invoice is not expected since ERS is used. This means that a job will run on predetermined frequency doing invoicing based on Goods and Service Confirmation (In this case approved Time Sheets).

Figure 11 ERS jobs for automatic Supplier Invoicing

The Invoice process can typically run automatically every month.

In the Document Flow for the Purchase Order generated from the Project you will see the whole process from Project Purchase Request to Invoicing. Remember that Goods And Service Confirmation in this case are approved Time Sheets.

Figure%2012%20Document%20Flow%20for%20Purchase%20Ordre

Figure 12 Document Flow for Purchase Ordre

Conclusion

SAP Business ByDesign has built in functionality that can be used Hiring Contingent Workers. If you establish Sourcing Contracts with ERS (Evaluated Receipt Settlement) the settlement with suppliers can be done automatically based on Project Managers approval of Service Agents Time Sheets.

2 Comments
You must be Logged on to comment or reply to a post.