Related Modules
Screenshots
Controlling Costs and Margins for Project-based Businesses
Most Financial Accounting systems are designed for Manufacturing or retailing businesses and the few Project Accounting systems that exist, focus on service-based organisations and not on the specific needs of Project-based engineering companies who undertake sizeable, one-off projects and need to maintain tight gross margin control of contracts.
The system focuses on streamlining the entry and processing of all project-related transactions using flexible, user-defined project structures. This enables your business to effectively control projects from first contact through to completion, with a detailed view of the eventual profitability throughout the project and controls for the prudent recognition of revenue from those projects in your financial accounts.
SYSTEM FEATURES
Data is only entered once
The fully integrated system eliminates the need for re-keying information. Estimates are created during the quotation process in CRM. This is carried forward into the Project Costing system if the quotation is won. Similarly, much of the cost data required for putting together quotations is contained in the actual costs of completed projects. This data is available to the person preparing a quotation in the CRM system.
Similarly, during the design stage Part lists and Bills of Materials are created. dataflow can use this same data for purchasing and stock issue.
Integrated Financial and Project Costing Data
Most project costs are processed through the financial accounting system. However, the way they need to be analysed in the financial ledgers differs from how you would want to analyse and view costs for project management. dataflow Project Accounting provides analysis of the same transactions by both financial accounting and project management views, which means that relevant and accurate information is available to the right people whatever their role or requirement.
All Project Costs are Captured
Project costs such as labour hours, works orders are processed through Project Accounting and update the financial accounting system. The same transactions provide analysis for both the financial accounting and project management views.
Flexible Project Structure
Typically, individual projects will have different project structures in terms of milestones, tasks and cost types. dataflow Project Accounting provides a very flexible project structure with three levels of analysis for:
- Project Level: Information relating to the overall project
- Line Level: As many lines as required for different project stages or individual revenue items such as equipment or services
- Cost Level: Detailed cost analysis by any number of user-defined types, such as Labour, Purchases, Plant, etc.
Cost and Gross Margin Figures Always in View
dataflow Project Accounting is focused on Gross Margin control throughout the life of the project which means that figures are prominent on all project review screens at all levels of the project for:
- Estimated Cost to completion
- Current Actual Cost
- Remaining estimate/budget to completion
- Final Sales Value
- Current view of likely Gross Margin
Early Recognition of Project Costs
Project costs are likely to be incurred prior to actual expenditure. dataflow Project Accounting immediately recognises all liabilities as soon as Purchase Orders are placed or Works Orders raised. Overspend is identified early, giving you the control and visibility you need to measure project performance accurately and take any necessary action to avoid the overspend.
Valuation of Work-in-Progress
The system offers various methods of valuing Work In Progress, providing measures to handle different types of contract within the same organisation including:
- Percentage Complete Method
- Value at Cost Method
SYSTEM OVERVIEW
Project Costing and Analysis
As standard, the design of Jobs or Projects can be implemented to suit particular requirements. The Project Header defines detailed operational parameters and can be set up as simply or as detailed as required to suit the way you business works. Below the header there are two further tiers. The first tier can be used to represent specific project categories of revenue, work or activities, the second tier maintains the unlimited cost breakdowns under each category in tier one.
User definable configuration options include:
- Multiple project types and analysis levels
- Operational Status levels
- Milestones
- Multiple cost categories
- Nominal Ledger mapping
Multiple budgets enable Estimates to be revised in line with any variations or extras that arise during the course of a contract and enable actual costs to be compared against these revised estimates without losing sight of the original estimate.
Budgets/estimate maintenance provides for comparison against actual and committed costs recorded via the financial and Cost ledgers. Usually the structure and estimates for a new job will be brought forward from the CRM/Quotation system but a new project can be created simply from an existing project (template) using a ‘COPY’ command which will include all estimates set on the original. Alternatively, a new project along with it’s estimated costs can be created from scratch through the Project Costing System.
Cost Management
The dataflow Project Management and Accounting system embraces all the business processes associated with the capture and management of project cost information at source. The system collects costs as they are incurred from Purchase Orders, Labour Timesheets, Purchase Invoices, Works Orders and issues from Stock, and continually compares the actual costs to estimates, recording and highlighting any overspend. The system also allows you to closely monitor the value of the remaining estimate/budget to completion of the project.
Accountant's View vs Project Manager's View
Accountants and Project Managers look at Project costs in very different ways. Accountants are interested in:
- Costs to a period end
- Achieving a precise cut-off at period end
- Valuing the work against the period end costs
- Costs and Revenue for project as a whole
- Committed costs
- The Funds they have got left to complete the project within Estimate
- The anticipated FINAL Cost and Revenue on the project
- Project Managers are NOT interested in period end figures
- Drill down of costs through the entire project structure
dataflow Project Accounting allows each party to view the costs in the way most appropriate to them, but both views are based on the same data which has only been entered ONCE.
Project Performance Tracking
The Project Accounting System offers multi-levels of analysis of costs within a project and is designed to recognise costs at the earliest possible moment, so that any overspend can be spotted while you still have time to correct it. Project Accounting gives you the control and visibility you need to measure project performance timely and accurately.
Project performance and costs can be viewed on a Cumulative-to-date basis or by period at the Project level or at any Revenue or Cost Level within the project. In all cases, extensive drill down to the source transactions is provided.
Project Alerts
Primarily for use at Project review meetings to assign agreed actions and tasks to appropriate personnel.
Typical Project Alerts would include:
- Warnings of potential overspends
- Information on promised deliveries or completion dates
- Action reminders
These alerts can be distributed by email to specific users or groups.
Work In Progress
The valuation of work-in-progress (WIP) in particular on long term contracts is notoriously difficult. It is frequently the largest single figure in a company's balance sheet and has a direct influence on the bottom line profit. dataflow Project Accounting provides a consistent, logical basis for valuation of WIP backed up by supporting evidence and full trace ability.
Flexible Cost and Revenue Recognition
The dataflow Project Management and Accounting system enables you to specify, for each contract, which method is appropriate for recognition of revenue in order to give your periodic management information and ensure your compliance requirements are met at your year-end. It will produce a detailed schedule for all your live contracts and prepare the journals required for your period end accounts allowing you to track the movements on individual contracts.
Percentage Complete Method in accordance with SSAP9
This is used for long term contracts where the final revenue value is known or can be estimated reliably and profit is taken based on actual costs incurred as the contract progresses. Facilities are built into the system which will create the management accounting entries required for this method of revenue recognition.
If you are taking profit on long-term contracts during the course of the contract as required by SSAP9 and the tax laws of many countries, it is crucial that you do not take profit too soon and then find that any overspend at the end of the contract not only comes straight off your profit, but also requires you to write back profit you have already taken.
The system incorporates two features to prevent the over-valuation of Work In Progress:
-
The ability to review costs, overspends and remaining estimates/budget at each project stage gives management the opportunity to intervene and set a revised margin based on the latest forecast which will be used for the valuation of WIP.
-
To allow for unexpected costs or uncertainties within the final outcome, user-defined percentage provisions (mark-downs on gross margin) are made for margin erosion. These provisions diminish as the stage of completion progresses and outcomes become more certain giving you complete control over the degree of prudence to exercise.
Value at Cost Method
Smaller shorter term contracts are usually valued at cost and the system will generate the necessary journals to value these contracts at cost for the work-in-progress in your monthly management accounts.
Enquiries and Reports
Offering powerful drill down and reporting capabilities, dataflow Project Accounting allows you to view cost data according to your needs:
- for the project as a whole
- by each Revenue line or stage making up that contract
- by the type of cost in each Revenue line or stage
Project enquiry displays a full status with visibility of profitability, detailed transactions, summary data by period and milestone, budget comparisons and ‘alerts’ to identify overspend.
Timesheets
dataflow Project Accounting offers powerful web-based, online timesheet management for analysing staff and resources to projects with easy-to-use input screens, whilst maintaining control of project labour recovery.
Hours can be entered to the system by:
- The individual himself over the Web from anywhere in the world
- A clerk in the office from a paper timesheet
Other benefits include:
- Management Approval screens to reduce paperwork.
- Holiday Planner.
- Departmental Planner.
- On screen timecards to automate calculation of activity elapsed time.
- By recording the whole of a persons’ time, the benefits go beyond project recovery onto support for a personnel system, with holiday and sickness allowances and to feed time worked into a payroll system.
- It is possible to book more hours than available on an estimate and a suitable overspend transaction will be created at the time of posting.
CAD & Bills of Materials for Engineering
The dataflow Project Management and Accounting system has a link to industry standard CAD packages, Autocad and Inventor, which enable you to prepare priced Bills of Materials in CAD, check that your design is within estimate by importing prices from the Dataflow financial ledgers and export that Bill of Materials into dataflow Project Accounting. It can handle multi-level Bills of Materials and Sub-assemblies.
Within the dataflow Project Management and Accounting system, you can use the Bills of Materials which includes labour estimates, to create Works Orders and to raise Purchase Orders for the components required to fulfil the project. It is at this stage that the costs to which you are about to commit, are recognised by the Project Accounting system and you are warned if you exceed the estimated costs, so that you can look for a cheaper way of doing the same thing, before you place any orders.
Customer Relationship Management (CRM)
The unique feature of the Customer Relationship Management system (CRM) is that it is multi-relational and is web based. Project based businesses focus on projects, but the industry standard CRM systems focus on contacts.
A specific project will have many external contacts involved, e.g:-
- At the plant where the project is to be located
- Working for the Architect
- Working for the Consulting Engineer
- Working for the Main Contractor
- Working at the client’s corporate Head Quarters
Note the several contacts involved and the several different activities connected with this client that can be viewed in the lower half of the screen.
The dataflow CRM system enables you to trace the many links between individual contacts that exist. This information can be input and accessed over the web from anywhere in the world.
The CRM system will also enable you to send information to your contact list in many different formats and record a response. It will also record a response from exhibitions and advertising, and monitor and analyse access to your web site.
The dataflow Estimating and Quotation Management system (EQM) helps you to put together your quotation and track it to maximise the probability of turning it into an order.
Again, information including any client feedback and the salesman’s latest estimate of the probability and timing of an order, can be input and accessed over the web from anywhere in the world.
The dataflow Order Intake Forecasting System (OIF) enables you to review the probability and timing of all your live quotes and to analyse those live quotes by various criteria in order to forecast your order intake on the best available data.
Customisation and Integration
We understand each business and industry is unique and may require additional modifications and integration.
dataflow’s strength is reinforced by it’s unique integration and customisation ability allowing you to create tailored solutions to suit your organisation’s requirements without altering the underlying source code and relax knowing that all modifications are automatically re-applied when a new release becomes available.
Dataflow’s Accounts Internet Server portal provides, in a secure environment, all the components needed to add your own web-based interface to perform any accounting process via the Internet or Intranet to dataflow, (without the need for the developer to know any accounting technical details,) within the secure dataflow accounts server using standard XML messages.
If you don't have the resources in-house, or if you need additional modules created our programmers and software engineers have experience in a variety of programming languages and methodologies to integrate or build web-based, client/server or desktop applications to streamline or automate your processes within your organisation.