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[Vanessa Halacsy]

We are a trucking company, using GP2018, TMW (Powersuite) for the Operations and Settlements, and TMT (Transman) for the Maintenance Garage.

TLDR: Owner Operator drivers are both vendors (independent contractors) and customers (of our garage), how to tie together deductions from their vendor pay to payment of their customer invoices?

Long version:
Here is the old, cumbersome process for driver deductions:

Let’s say an O-O gets his tractor repaired in our shop.
The garage creates an invoice in TMT, and does NOT transfer it to GP. (That means they have to switch the interface between softwares on and off between invoices, and know which ones go and which ones don’t, which is error-prone.)
The garage sends a paper copy to the Driver Pay person.
Let’s say the driver wants to pay for half of the repair with his engine escrow.
Driver Pay gives the invoice to Accounting.
There’s a spreadsheet that lists the balance in his escrow.
The Accounting person makes a note on the spreadsheet to reduce the escrow amount, what the remaining balance is on the invoice, and send it back to Driver Pay.
Driver Pay runs the settlement for revenue for the driver’s gross pay.
Driver Pay manually calculates how much can be deducted, based on other deductions, such as fuel that take precedence, and often trying to leave the driver with a certain minimum of net pay.
Driver Pay notes the amount taken on the spreadsheet, and manually creates a credit memo in GP for all the driver’s deductions (this is many lines for each driver).
Because there is no invoice in GP, that also means breaking down the garage invoice into component parts of revenue – parts, labor, etc, which could be many different GLs.
Driver Pay imports the gross pay to GP, where AP reduces the resulting invoice by the amount of the credit memo and creates a direct deposit file to pay the driver.
Accounting enters a JE to show the reduction in escrow amount for the driver, also having to break down the amount that was taken from escrow into the component parts of maintenance revenue and the corresponding GLs.

Because everything is hand entered all the way along, it is error prone, and results in things like a driver calling to get the balance due on their repair invoice and someone having to find the paper and add up all the deductions that have been taken out so far. It also results in some over or under deducting, some invoices being missed, difficulty tracking total expenses for the drivers, difficulty tagging the garage revenue to the relevant expense, and a very tedious manual reconciliation for the balances in the escrow accounts.
Doing all of this manually for a couple hundred drivers is more than a full time job.

Then we heard that TMW has such a thing as settlement deductions. The functions look pretty good so far – we can set up standard deductions (like the regular amount that goes to their escrow), import fuel spreadsheets for their fuel, import maintenance invoices directly from TMT, etc. We had to change some of the ways we did things so that it would work, so we’re doing that. We also decided to start importing all invoices into GP from TMT, so that there wouldn’t be switching back and forth, and everything would flow through to the financial software where it should be.
So now we’ve run into a question of how to tie the payment that is a deduction from the driver’s (vendor’s) payment, to the maintenance invoice to the driver (customer).
We have found the Customer/Vendor card in GP that appears to let us link the driver-as-vendor and driver-as-customer together, but are not quite clear on how it works exactly.

Ideally, this is what I’m looking for:
An O-O gets his tractor repaired in our shop.
The garage creates an invoice in TMT, which transfers as a customer invoice to GP, and a deduction to TMW.
Deduction setups calculate the amount of the deduction and track the remaining balance in TMW.
Driver Pay runs the settlement for the driver’s gross pay and that week’s deductions.
The settlement transfers to GP with gross pay and deductions, which are already tagged to the correct GLs from TMW.
Accounting does *something* to tie the vendor deduction to the customer invoice.
Everything is tracked, tied out, visible in reporting, and takes half the time.

What is the something? My Accounting spc suggested maybe setting up a “checkbook” as the escrow account? Deposit the deductions there and pay the expenses (invoices for the garage, fuel, etc) out of it? Would that work? What steps are involved?

Thank you!

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Vanessa Halacsy
Controller
Wooster Motor Ways, Inc.
Wooster OH
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[Brenda Zeben]

Vanessa – Here is our process:

When we have deductions for our contractors(PVOs) we enter the entire amount in payables as a credit memo, even if we will not deduct the whole amount from them right away.

Here are a few examples of our process:
If Company A invoiced us and we needed to charge the PVO, we enter the invoice under Company A’s vendor id and code it to GL 2590(our clearing account), then we enter the credit memo under the PVO vendor ID and code it to GL 2590.  GL 2590 should always have a zero balance.

If the PVO picked up uniforms from us, we enter a credit memo under the PVOs vendor ID and code that to our uniform expense account(because we don’t bother keeping track of our uniform inventory we just credit it to expense)

When we get our fuel tax report from Atlas Van Lines we upload the credit memos(and invoices, for the ones that are due refunds) to the PVO vendors using a smartconnect map.  The credits go to our Gl clearing account for Atlas charges – waiting for the charge for Atlas.

If we have an accounts receivable invoice that a PVO needs to pay we enter a credit memo for the full amount to the PVOs vendor ID, and the credit goes to our GL account 1115 where we initially record COD payments from customers.(another clearing account)

Then we record a cash receipt and apply it to our AR invoice. The cash receipt debits GL 1115.  The cash receipt is recorded as a type Credit Card, and we have a specific credit card ID that distributes to that account.

The AR balance is then zero.  Because the whole amount of the invoice was charged to the PVO when we look at the vendor ID we always know what the PVOs balance is.

We have an Excel Refreshable report that pulls all the information we need from purchasing to pay the driver – listing all of document IDs and descriptions.  If we have an agreement with a PVO as to a payment schedule for an equipment repair we may note that on a separate tab in the Excel file for reference. We use the report to decide how much to pay the PVO on their settlement.

After determining the payment amounts we go to Apply payables documents and, referencing the information on our Excel report, we apply the credits we are taking that day to the invoices.  If we had a $3,000 charge we would only apply $1,000 of that charge. 

After applying the credits we building our payment batch.

If a PVO calls and wants to know how much he/she owes we can go to the Transaction by Vendor inquiry and easily see how much he/she owes and also provide the dates and amounts of any deductions we already made for that charge.

Regards,
Brenda Zeben

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Brenda Zeben
Controller
Imlach Movers, Inc.
Trenton MI
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