Business assumptions

A G-account, also known as a blocked account, is used in the construction and temporary employment industries in the Netherlands as a specific type of bank account. The main purpose of a G-account is to establish a separate payment system between a principal contractor (e.g., a contractor) and subcontractors or temp agencies they hire.

When a principal contractor works with subcontractors or temp agencies, the Tax and Customs Administration (Belastingdienst) can hold the principal contractor liable for unpaid payroll taxes and turnover taxes of those subcontractors or temp agencies. To limit this risk, the principal contractor may choose to transfer the money for the invoices of subcontractors or temp agencies to a G-account, instead of directly to their regular bank account.

The G-account functions as an intermediary account where the principal contractor deposits money. This money can only be used to pay the due taxes and social security contributions to the Tax and Customs Administration. As a result, the money remains separate from other financial resources of the subcontractors or temp agencies, reducing the risk for the principal contractor.

Solution Direction

Vendor card

This functionality is setup on the vendor card, in the tab ‘Payments’. Three new fields are added in this section: G-account, G-account percentage, Outsourcing. The values that are entered here, are default values

• G-account: Select the vendor’s G-account
• G-account percentage: Enter the percentage of the payroll amount that should be allocated to the G-account
• Outsourcing: Specify whether this vendor is outsourced/a subcontractor. When this is set to ‘No’, the G-account and G-account percentage fields are greyed out.

Invoice register

When an invoice is registered in D365, on the ‘General’ tab the information of the G-account can be found. The default values from the vendor card are copied, and two extra fields are added: Payroll amount and Allocation percentage.

• Payroll amount: The total amount of the invoice that can be allocated to labor costs. In some cases there are also material costs on the invoice, which may be excluded from the G-account payment.
• Allocation percentage: This is an automatically calculated field which is influenced by the G-account percentage and Payroll amount. This is the percentage of the total invoice amount (including tax) that is allocated to the G-account.

During the registration of the invoice, the G-account percentage and Payroll amount are editable, but the fields G-account, Outsourcing and Allocation percentage are not.

Vendor payment journal

When making a payment proposal as usually, the payment is automatically split into the regular bank account and the G-account. The amounts are inherited from the invoice register.

Payment report

There are some changes in the payment report in order to show relevant and important information. You can access the report from the Payment journal > Print > Payments. In the report, three new fields are added.

• Invoice date
• IBAN
• Swift code

Workflow vendor approvals

In the General tab in the Account payable parameters, the field G-account is added for the vendor approval workflows. Therefore, this can be used in any existing workflows for the vendor approvals

ISPnext

The G-account functionality is also integrated with the AP Automation of ISPnext. In order to use the functionality, additional setup needs to be done in D365. This can be done in setup parameters of the ISPnext module, ISPnext > Setup > Parameters. Navigate to the G-account tab and select ‘HSO’ for the active G-account module. Setup the Vendor and Journal fields as shown in the screenshot below