How to Record Subcontractor Pass-Through Fee
Recording the administrative markup or pass-through fee on subcontractor costs as specified in the contract terms.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Unbilled Receivables | Asset | 2,500.00 | - |
| Service Revenue - Administrative Fees | Revenue | - | 2,500.00 |
💡 Accountant's Note
This entry recognizes the fee the prime contractor is entitled to for managing subcontractor efforts, typically a small percentage of the subcontractor's invoiced amount.
Practitioner & Systems Framework
💻 ERP Architecture
Ensure the billing module applies the correct rate to the subcontractor cost element within the project ledger.
⚠️ Audit Flags
Verification of contract clauses allowing for G&A or specific fee application on subcontractor labor.
📄 Required Documentation
Subcontractor invoice, contract fee schedule, and proof of management oversight.
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Discussion & Community Questions
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