Contractor Invoicing: Setup & Management Guide for Org Admins

Overview

This guide covers everything Org Admins need to know about managing contractor invoices in the Toku HRIS, including auto-invoicing setup, manual invoice handling, reviewing and approving invoices, and key deadlines.

Important: All contractor payments require pre-funding**.** Toku's finance team will send a pre-funding invoice after all invoices are approved that must be funded before the payment can be processed. Payment must be received at least three business days before payday, or the contractor's payment will be delayed.

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Understanding Contractor Invoicing

Every pay cycle, contractors need to have an invoice submitted for their payment to be processed. There are two ways this can happen:

Manual invoicing (default): The contractor submits their own invoice each pay cycle through the Toku platform.

Auto-invoicing: The system automatically generates and submits invoices on behalf of the contractor based on their yearly invoice amount. The admin enables this feature and the system calculates the per-period amount by dividing the yearly total by the number of pay periods based on the selected frequency (e.g., monthly = 12 periods, bi-weekly = 26 periods).

Regardless of which method is used, all invoices require admin review and approval before payment is processed. Auto-invoicing only automates the submission step - it does not bypass the approval workflow.

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Key Deadlines

What happens if these deadlines are missed? Contractor payments may be delayed by up to 10 business days. If you spot an issue with an invoice close to the deadline, contact [email protected] immediately so it can be resolved before the cutoff.

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Part 1: Setting Up Auto-Invoicing as an Admin

Benefits of Auto-Invoicing

• Eliminates the need for contractors to manually submit invoices each cycle
• Reduces errors and missed submission deadlines
• Streamlines the payroll process for both admins and contractors

How to Enable Auto-Invoicing as an Admin

1. Navigate to Organization Settings from the menu bar.
2. Click Settings.
3. Select the Contract Invoices section.
4. Configure the two toggles:

• Enable Invoice Auto-Submit — Set to Yes to allow invoices to be automatically submitted on behalf of contractors.
• Auto-Invoice Status — Set to Enable to activate automatic invoice generation.

1. Enter the contractor's yearly invoice amount. The system will calculate the per-period amount automatically based on the selected payment frequency.

Important Notes on Auto-Invoicing

• This can only be turned on by the client admin. Contractors cannot turn this on.
• Auto-submitted invoices still require admin approval each cycle. The automation only handles the submission step.
• If a contractor receives additional compensation (bonus, stipend, etc.), that amount will not automatically appear on their auto-generated invoice. The contractor must submit a separate invoice for any additional amounts.

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Part 2: Reviewing, Approving, Editing, and Rejecting Invoices

This workflow applies to both auto-submitted and manually submitted contractor invoices.

How to Access Contractor Invoices

1. Log into the Toku platform at https://app.toku.com/.
2. Navigate to People → Contractor Management → Invoices.

Actions You Can Take on an Invoice

Approve — Approve the invoice as-is for payment processing. Click the three-dot menu under the Action column and select Approve, then click Yes to confirm. Once approved, the invoice cannot be modified.

Reject — Reject the invoice if it is incorrect. You can then either ask the contractor to submit a new invoice with the correct amount, or edit and resubmit the invoice on their behalf.

Edit — Click the pencil icon (next to the eye icon) to modify the invoice amount or details before approving. Use this when the auto-calculated or contractor-submitted amount needs adjustment. After saving your edits, you can proceed to approve the invoice.

Approval Workflow Summary

1. Review the invoice details for accuracy.
2. If the invoice is correct → Approve and confirm with Yes. This is final.
3. If the invoice needs a minor correction → Edit the invoice using the pencil icon, save, then Approve.
4. If the invoice needs to be resubmitted entirely → Reject the invoice and notify the contractor to submit a corrected invoice.

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Part 3: Additional Compensation for Contractors

When you need to pay a contractor a bonus, stipend, or one-time payment in addition to their regular invoiced amount, there are extra steps compared to processing additional compensation for employees.

How It Works for Contractors

1. The admin submits the additional compensation through the Toku HRIS (via People → People Directory → select the contractor → Additional Compensation → Add Compensation).
2. The contractor must also submit a separate invoice for the additional amount. It will not automatically appear on their auto-generated or regular invoice.
3. The admin then reviews and approves the contractor's invoice for the additional amount following the standard approval workflow above.

Timing and Pre-Funding

• The contractor must submit their invoice for the additional amount by the 19th, and the admin must approve it by the 21st, to be included in that month's payment cycle.
• All Payments require pre-funding. Toku's finance team will send a pre-funding invoice that must be funded before the payment can be processed. Payment must be received at least three business days before payday, or the contractor's payment will be delayed.

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Frequently Asked Questions

Q: What is the difference between auto-invoicing and manual invoicing? With auto-invoicing, the system automatically generates and submits invoices each pay cycle based on the contractor's yearly amount. With manual invoicing, the contractor submits their own invoice each cycle. Both methods require admin approval before payment is processed.

Q: Does enabling auto-invoicing mean invoices are automatically approved? No. All auto-submitted invoices still require admin review and approval. The automation only handles the submission step.

Q: I submitted additional compensation for a contractor, but it's not showing on their invoice. Why? Additional compensation (bonuses, stipends, one-time payments) does not automatically appear on a contractor's invoice, whether it is auto-generated or manually submitted. The contractor must submit a separate invoice for the additional amount.

Q: What happens if I approve an invoice after the 21st? Contractor payments may be delayed by up to 10 business days. If you're close to the deadline and spot an issue, contact [email protected] immediately.

Q: Can I edit an auto-submitted invoice instead of rejecting it? Yes. Click the pencil icon to edit the amount or details, save your changes, then approve the invoice. You do not need to reject it and have the contractor resubmit.

Q: Can I undo an approval after confirming it? No. Once you click "Yes" to finalize the approval, the invoice cannot be modified. If you approved an invoice in error, contact [email protected] as soon as possible.

Q: What if a contractor's regular pay amount changes mid-year? Update the yearly invoice amount in the auto-invoicing settings. The system will recalculate the per-period amount going forward.

Q: What happens if a payment is over $5,000 USD? Toku's finance team will send a pre-funding invoice that must be paid before the compensation can be processed. This adds an additional step and timeline to plan for.

Q: What's the difference between the 19th and 21st deadlines? The 19th is the deadline for contractors to ensure their invoices are accurate and finalized. The 21st is the deadline for admins to review and approve (or reject/edit) all contractor invoices. Both must be met for on-time payment.

Q: A contractor's auto-invoice has the wrong amount this month. What should I do? You have two options: edit the invoice directly using the pencil icon and then approve it, or reject the invoice and ask the contractor to submit a corrected one manually. Editing is faster if it's a simple amount change - just make sure this is done before the 21st.