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Agency workers, attendance and bills

Keep the attendance of workers from manpower agencies and build each month's bill from it at the agreed rates. Compare it with the agency's invoice, approve it only with a valid licence and the month's challans, and get a vendor bill.
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Why it matters

Security guards, housekeeping and drivers from an agency often make up a large share of the people on site. Yet the agency's invoice is usually paid as it comes. Nobody checks the days billed against who actually came. As principal employer you carry the risk if the agency has not paid PF and ESIC or its licence has lapsed. In SmartMy HRMS agency workers punch in like everyone else, and the bill is built from that attendance at your agreed rates. The difference from the agency's invoice is shown. A bill cannot be approved while the licence has expired, a challan is missing or a difference is not explained.

The problem it solves

  • The agency invoices for 30 guards for the full month, and you have no figure of your own to check it against.
  • Overtime is billed at a rate nobody remembers agreeing to.
  • As principal employer you are liable if the agency skipped PF or ESIC, and the challans are never asked for.
  • The agency's contract labour licence expired months ago and nobody noticed.

How it works

  1. Add the agency: the vendor, contract dates and how it bills (per head per month, per day present or per hour worked). Add the service charge and GST, the contract labour licence with its expiry, and its PF and ESIC codes.
  2. Add the rates: per designation, with an overtime rate per hour and the date each rate applies from.
  3. Add the agency's workers as employees with the Agency tab filled in: the agency, their agency worker ID and the deployment dates. They use shifts, punches and the register like anyone else, with no salary.
  4. At month end, make an agency bill for the period, type the agency's invoice number and amount, and press Fill from Attendance. Each worker's days, payable days, hours and overtime come in with the rate.
  5. Attach the month's PF challan, ESIC challan and wage register, and press Verify. The approver approves it from the approvals inbox.
  6. On approval, a draft vendor bill for the agency is made in accounting with the manpower charge, service charge and GST. The accounts team checks and posts it.

Everything it does

The agency

  • Vendor, entity, contract from and to
  • Billed: per head per month (the default), per day present, or per hour worked
  • Service Charge % and GST % (18% to start with)
  • Contract Labour Licence No. and Licence Valid To
  • PF Establishment Code and ESIC Code
  • Compliance Documents Before Approval: on by default
  • Workers tab: everyone deployed by the agency

Rates

  • One line per designation; a line with no designation is the rate for every other designation
  • Rate per month, day or hour, as the agency bills, and Overtime per Hour
  • From: the date a rate applies; the latest rate on the bill's last day is used

Agency workers

  • An employee record with Agency, Agency Worker ID, Deployed From and Deployed To
  • Attendance as for everyone: shifts, punches from devices or the app, the monthly register
  • Not on your payroll: the agency is paid by bill

The monthly bill

  • A number by itself, such as AGB/2026/0001
  • Fill from Attendance lists each worker deployed in the period. It shows Days Present, Payable Days (days present plus paid weekly offs and holidays), Hours Worked and Overtime Hours
  • Per head per month: monthly rate times payable days, divided by the days of the period
  • Per day present: daily rate times days present; per hour worked: hourly rate times hours worked
  • Overtime hours times the overtime rate are added in each case
  • Subtotal, service charge, GST on both, total, and the Difference from the agency's invoice
  • Draft, Verified, Approved, Cancelled

Checks before approval

  • Verify is refused if a worker has no rate
  • Approval is refused if the licence expired before the end of the period
  • With compliance on, approval needs the PF challan, ESIC challan and wage register attached
  • A difference from the agency's invoice needs a note explaining it
  • Compliance Checked is ticked by the system on approval
  • An approved bill cannot be cancelled or deleted; Back to Draft works on a verified or cancelled one

Into accounting

  • With an Agency Bills Journal and a Contract Labour Expense account on the entity, approval makes a draft vendor bill
  • Lines: manpower services and service charge on the contract labour expense account, with the purchase GST tax
  • The agency's invoice number is the reference; the Vendor Bill button opens it
  • Without the journal, no vendor bill is made

Who uses it

HR officerKeeps agencies, rates and workers, fills and verifies the monthly bill.
ApproverApproves the verified bill or sends it back to draft.
Accounts teamChecks and posts the vendor bill.

Where you use it

  • Web: HRMS > Employees > Contract Staff (Agencies, Agency Bills); the employee record, Agency tab
  • Web: approvals inbox for agency bills; the entity's Payroll Accounting tab for the journal and expense account
  • The SmartMy HRMS app: agency bills are approved in My approvals. Agency workers' attendance comes from the same devices and check-in as everyone's (the app is built and in testing, not in the app stores yet)
  • Not on a portal: the agency does not log in; its invoice is typed in and its challans attached

What you control

Settings

  • Billed: per head per month, to start with
  • GST %: 18
  • Compliance Documents Before Approval: on
  • Agency Bills Journal and Contract Labour Expense: empty, so no vendor bill until you set them

Approvals

  • Agency Bill: one chain per entity; HR officers to start with, with levels you add. A rejection sends the bill back to draft.

Notifications

  • Approvers get each verified bill in their approvals inbox
  • No separate notice events for agencies or agency bills

Questions

Are agency workers paid through our payroll?

No. They are employee records for attendance only, with no salary. The agency is paid through its bill.

What if the agency's invoice does not match our total?

The bill shows the difference. You can still approve it, but only after writing in the notes why it differs.

Can we approve a bill without the PF and ESIC challans?

Not while Compliance Documents Before Approval is on for that agency. Switch it off per agency if you do not want the check.

What happens when the licence has expired?

A bill whose period ends after the licence expiry date cannot be approved. Update the licence details on the agency first.

Does it post to our books by itself?

It makes a draft vendor bill when the entity has an Agency Bills Journal and a Contract Labour Expense account. The accounts team checks and posts it.

Related features

ATTENDANCEDaily attendance, regularisation and the registerEvery employee gets one attendance record a day with the status, paid days, loss of pay and late, early and overtime minutes. It says in plain words which rules gave the result. Employees correct missed punches by request, only authorised HR can change a day, and the monthly register exports to CSV.SHIFTS, OFFS AND HOLIDAYSShifts, rotations and the roster plannerDefine fixed, night, split and flexible shifts and run 24-hour rotations with teams offset from each other. Plan who works what on a grid of people by days. Shift swaps need the colleague's acceptance and the manager's approval, and every change flows into that day's attendance.ATTENDANCECheck-in on the web, the phone and attendance devicesStaff mark attendance in the browser from the office network, or from their own approved phone with a selfie and a location check. ZKTeco and eSSL device punches come straight to the server. All punches of a person count together for the day.STATUTORY AND TAX, INDIAPF, ESI, professional tax, LWF and minimum wageEvery payslip works out PF with VPF, pension and EDLI, ESI, professional tax and the labour welfare fund from your Entity's settings. The ECR file, the ESIC sheet, the register of wages and the muster roll come out of the same payroll run.ACROSS SMARTMY HRMSApproval chains and one approvals inboxEvery HR request, from a day's leave to the full and final, goes through its approval chain and waits in one Approvals inbox. Levels, approvers, reminders, escalation and stand-ins are settings you control, per Entity and kind of request.PAYROLLPayroll runs, approval and lockRun payroll per Entity and pay period straight from the attendance record, with joiners, leavers and mid-month revisions worked out. Approvers review it on one screen, salaries can be held and released, and a paid payroll is locked and reopened only with a reason.

See your own month run in it.

Tell us how many people you have, how you take attendance and how your salary is structured. We will show you SmartMy HRMS set up that way.
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