Gross billings are not the number. The spread is.
On the temp desk you are the employer of record, so revenue is recorded at gross billings and every dollar of assignment-worker pay sits directly beneath it as a cost of sale, not buried in overhead. That is the correct treatment, and it is also a trap for the unwary reader: a big top line can hide a margin measured in cents per assignment hour. The number the books must surface is the spread per hour, by client and by placement, after every statutory cost that hour carries.
Blended books fail in a specific way here. A strong perm quarter papers over a temp desk that has quietly slipped below its floor, and the owner finds out two rate negotiations too late. Our chart of accounts splits the desks from the first line, so each one answers for itself every month.
Temp and perm are different machines. The ledger should say so.
Perm placement revenue arrives as a fee when a candidate starts, and most fee agreements carry a guarantee period with a refund or a free replacement if the hire leaves early. The clean treatment is to invoice on the start date and hold a fallout provision against fees still inside their guarantee window, so a bad quarter for sticking candidates does not land as a surprise credit note against income you already spent.
| What the books must show | Temp desk | Perm desk |
|---|---|---|
| Revenue | Gross billings, weekly, per client | Fee on the start date |
| Cost of sale | Worker pay plus full statutory burden | Recruiter time and job-board spend |
| Cash shape | Pay Friday, collect in 30 to 60 days | One invoice, then the guarantee window |
| Risk line | Margin drift per client | Fallout provision for early leavers |
The burden decides whether a placement made money
An assignment hour costs far more than the pay rate, and the books have to accrue those costs the same week the hour is worked. On top of wages sit employer CPP, EI at 1.4 times the employee premium, vacation pay accruing at 4 or 6 percent under the ESA, public holiday pay owed to assignment employees, Ontario's Employer Health Tax once payroll passes the exemption, and WSIB premiums. Accrue them per placement and the margin report tells the truth; leave them to year-end and every rate you quoted this year was guesswork.
WSIB follows the client's work, not yours
WSIB classifies a temporary employment agency's workers by the business activity of the client they are placed with, not by yours. An admin placement in a law office and a general-labour placement in a metal shop sit in different classes at very different premium rates, and the agency must keep earnings segregated by class; records that cannot support the split invite premiums at the highest applicable rate on the lot. So the payroll file tags every worker's earnings to a client classification from day one, and the tag flows through to what each placement really costs.
A weekly business needs a weekly close
Timesheets drive both payroll and invoicing, so one approved-hours dataset should feed both, whether the stack is Bullhorn feeding QuickBooks Online with payroll in ADP or Wagepoint, or something leaner with Dext catching the paperwork and Plooto moving the payments. Every week we reconcile hours paid to hours billed; any gap is leakage, and in this business leakage compounds at payroll speed. Receivables get aged weekly too, because collections are next Friday's payroll, a squeeze our Fractional CFO work takes on directly.
This is the cadence our End-to-End Accounting service runs for agencies across Mississauga and the GTA: books, payroll, reporting and tax filings under one roof, with the desk-level margin report as the monthly centrepiece. If WSIB or the CRA ever questions a classification or a remittance, the working papers behind CRA Audit & Review Support are already built.
