Users of your organization can be classified into groups, each groups are assigned relevant access right to effect operations.īudget Estimation Control supports users they are responsible for project tendering, variation order and estimation of additional cost of triggered events.Īctivity Progress Measurement Control supports users they are responsible for measurement and recording progress (e.g. In general, there can be establishing 5 control points as follows: – We can work with you to review your existing operations to uncover any improvement opportunity. Our construction organisation are facing operational issues in respect of 1) different meanings of construction cost, 2) timing difference of cost from measuring activity progress to signed copy of certified sub-contractor billing, 3) difference between activity progress and project progress. This support authorised users to configure reports to compare relevant balances between the ledgers of business unit and finance department. For example, each business unit can have their ledgers (rather than manage data in spreadsheet) to record the real construction progress on real time basis, finance department can continue existing practice to recognise account payable based on confirmed documents. Solving this root problem, administrator can configure Ledgers to support recording relevant data in difference phases. The traditional accounting practices are always working in conservative and prudent manner. The key issue encounter is mainly due to the existence of time differences between the real construction progress and the paper base confirmed and authorised progress. Existing practice finance department will maintain full set of account for all certified cost for sub-contractors and progress billing from project owners. You can finalise the account within 5 business days.ĭifferent projects and different stages of completion there are different story of the relative speed of progress payment to sub-contractors and from project owners. If the Ledgers “B01” and “C01” are properly implemented, the drafted financial close processing can be automated immediately upon completion of updating project progress. Actual Ledger “A01” can be configured to manage full set accounts from day-to-day treasury operations to monthly closing with notes to accounts.Certification Ledger “C01” can be configured to manage project completion stage by sub-contracting item and the automation of revenue recognition – support the generation of project profit and loss reports and drafting billing for project owners.Budget Ledger “B01” can be configured to manage updating project budget income and cost.Budget Estimation, Certified Cost & Financial Close) of business operations in the following ways:. Ledgers can be configured to manage different stages (e.g. invoice, debit note and monthly statement. Similar to manufacturing, the measurement of cost is based on internal recording system for business activity, rather than rely on external information and subsequent checking e.g. In fact, accounting practice for manufacturing can provide you the right direction to design a fast financial close model. Final step there shall be a contingency plan to deal with worse scenario of liquidity and associated risks to cater for unexpected delay project completion schedule whenever the system alerts you the project cashflow below the pre-defined safety level.Įxisting we can finalise monthly closing for about 30 business days when it is very time consuming to follow-up of signed copy of certified cost documents and related accounting entries for all projects.Īccounting for construction project shall not be more complex than accounting for manufacturing. Further step is to assign super-users to join a training on how to customise any domain specific system provided by our system consultants. Second step is to define segregation of duty for relevant user groups. Different frequency of changes we can implement most effective processing model to deal with relevant data amendments. To implement a reliable cashflow management module, first step is to document and confirm all relevant calculation rules and determine the frequency of changes in calculation rules for each class of operations. Assuming that project schedule for each completion stage is under control, the projection of cashflow classified by daily for coming month and monthly for coming year shall not be an issue. We are suffering from unexpected fluctuation of cashflow when the financial data of accounting software are not updating on real time basis.Ĭomparing with other industrial sectors, the committed contracts of construction business is relative large in size and longer in tenor.
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