Projects works very well.

First thing is to realize that payroll will be expensed to project as per payroll cheque date and not the period work was done in. This can be problematic if you have a holdback period such as week 1 & 2 is paid at end of week 3 and week 3 happens to be in the following month - this means the expense is not in same month the revenue is in. To get around that you can post directly from timesheets via purchase module and using a clearing account to zero out the invoices. You will need to initially calculate all of the costs per hour per employee and set up as recurring entry.

If you choose to do via payroll then the cost of payroll will automatically be calculated and expensed to projects it is allocated to via hours and will be using the paychq date as the expense date.

The sales invoice to customer will cover the minimum bill out rate as revenue charged to projects.

As to how to invoice material at cost plus markup - I'm not sure what you are asking here. Normally you would take the costs that you have, mark it up as per requirement, and then create a sales invoice to allocate to revenue. Or are you thinking of showing the expense and the mark up rate on the invoice itself? If so then you can do that by putting a mark up rate in the qty column and the expense amount in the price column. However I generally don't think this is a good idea myself for customer to see what your markup rate is.

Cost-plus contracts aren't that unusual, and often the original supplier invoice has to be provided along with the billing invoice.  These costs are accumulated toward a particular project, for both the purpose of project progress and cost tracking, but more importantly, for billing.

This is done for both convenience and efficiency - for instance a contractor may have a relationship with a suppliers, but doesn't stock anything.  The end customer doesn't have the expertise to select the correct product.  A contract charge of cost plus 15% might even be a better price than the customer / client would receive if they were to go direct.  

There are some accounting / billing systems that will do the billing part automatically, but Sage 50 does not.  The Projects in Sage 50 are strictly designed as a cost tracking system.  

Sage 50's Time and Billing really is just Time Tracking and Time Billing.  There's no easy way of making sure you have billed for all materials, other than diligently adding them to a Sales Order.

If you use an Edition of Sage 50 that supports project allocation for Purchase and Sales orders, you can run reports that will show you which items were purchased for the project vs. billed.  

smithco, if I understand, recording time in timeslips is just that, no financial impact

the financial impact occurs when the employee is paid, and the expense is recorded on the paydate

to deal with that, I can accrue the labor cost for the month using a JE, but I will do some testing,re " directly from timesheets via purchase module and using a clearing account" - is the statement (You will need to initially calculate all of the costs per hour per employee and set up as recurring entry.) part of the clearing account strategy ?

RandyW, if the client is already creating invoices with Excel, given that Sage probably can't replicate his cost+ needs, is it easier to continue using that excel format using Sage purchase/sales project allocation reports for the data. And simply record a basic invoice in Sage, to which payments/etc can be applied ?

and maybe one day, interface excel to mysql to auto populate the invoice ....

I can't really answer that, since I don't know the customer's exact situation.  It's more or less possible to type about anything into the Invoice screen, and the computer will tally it up and keep track of the accounting, and who owes money, and vice versa.  That's a lot of value added, if the client is coming from doing it all in Excel.

But...  getting to the next level, where it's easy to get the billing right, and hard to miss billing anything that they've bought, is far easier with software that supports the process.  Using Sage 50, figuring out what to bill in that situation is mostly a manual process, so it only saves time from the completed invoice, onwards.

In comparison to other software, in which one can, for example, record a purchase of 300 studs, a lift of plywood, and 1000 feet of 14/2 cable for the Johnson job site, and then next week someone who didn't know you had made any of those purchases, could pull up that project in the billing module, and correctly invoice all the materials, Sage 50 is nearly useless.  With Sage 50, out of the box, getting materials billing detail information out is so difficult that it would be faster and easier to stuff all the supplier bills in a paper folder, and handwrite the invoices on paper.

I'm making an assumption about the spreadsheet(s) your client is using, but I would imagine that Excel adds value to the process by storing lists, and making calculations based on those lists easy.  If it was just a matter of typing information neatly in columns, they might as easily use Word, or WordPad.

In a similar way, if all your client wants to automate the process from the timesheets through payroll, and from their sales invoice onwards, then Sage 50 will allow them to do it.  It just doesn't help them do the part up to the sales invoice. 

No - The clearing account is use to create a nil invoice. For example:

Joe Blow paid 20/hr but cost is 24.00 with vac pay, Employer cost of EI/CPP, WCB etc.

*Blow, Joe vendor is created and purchase invoice dated last day of weekly timeslip shows each line as Qty for hours worked on one project, price as 24.00, resulting in amount of cost coded to a 5000 acct nbr called Project Allocation and allocated to one project. Total hours in same purchase invoice will equal to total hour on timesheet (this is assuming you can allocate non-project hours to a project called 'Non-Project'). Then the last line is a negative amount of the total invoice and coded to another 5000 acct nbr called Project Clearing but not allocated to any project.

This method has no financial impact and therefore no reversal is needed.

ok, I setup a test company with a project, created a purchase invoice per your info

and the project reports show the expenses

I presume the clearing account is clear when a payroll is run ?

or is payroll completely disconnected from these two project accounts ?

and don't I have to reenter the timeslip info a second time for payroll ?

Payroll is completely disconnected between these two project accounts.

You will still have to renter the timeslip into payroll in order to pay the employees.

The only purpose of entering timeslip thru A/P is to record the expenses to the projects in the period it occurred in. Also if there are constant adjustments made to projects on timeslips then doing this thru A/P lessens any chances of payroll reversal not being the exact amount as original - especially with insurable earnings or if changes made such as WCB rate change (WCB rate will reversed at old rate but then adjust to new rate)

I should clarify myself here regarding my last comment - I enter into A/P from weekly time sheets that are completed by employees and approved by supervisors. I do not use Timeslips feature in Sage 50.

got it... so the project clearing account always matches the allocation account, creating a 0.00 net expense

allowing the costs to be allocated to projects without affecting the P&L