How Matcon holds gross margin on fixed-price contracts
A lean production specialist with offices in eleven countries replaced a generic accounting system with DataFlow Project Accounting, after finding that few packages could track the expected final cost of a contract.
Last updated:
- 6 systems evaluated before choosing DataFlow
- 11 countries with Matcon offices
- 1980 trading and profitable since
- Once data entered — never re-keyed
Inside Matcon.
Matcon specialise in ‘lean’ production solutions for process industry customers who handle powders or granules — food processing, pharmaceuticals, plastics, chemicals and detergents. Their systems run for high-profile customers across the globe, including Heinz, Nestlé, Pfizer and Unilever. With more than 25 years’ experience, Matcon are a genuinely international company, with offices in the USA, UK, Germany, Japan, Australia, Sweden, Netherlands, China, Spain and France.
- Sector
- Process engineering
- Trading since
- 1980
- Offices
- Eleven countries
- Work type
- Sizeable one-off, fixed-price projects
Generic accounting could not see a contract.
Matcon needed to manage the life-cycle of contracts across the business and hold tight gross-margin control.
Matcon had seen growth in business and profitability since they started trading in 1980. To manage planned growth in an increasingly competitive global market, they reviewed their business systems, with the objective of streamlining processes so that contracts could be managed across their whole life-cycle.
This was not simply a case of updating an old financial accounting system. Matcon needed an integrated solution that replicated the project-specific functionality of the in-house job costing system they had built to manage large one-off projects. A wide-ranging evaluation found that very few packages offered it.
As Chairman John Aird put it: “We knew that a generic accounting system would not meet our project-specific needs. As we evaluated the options, we found that the few project account systems available were focused on service-based organisations, where time-recording and billing were a priority.”
- Project cost control needed a different view of transactions already sitting in the financial ledgers.
- Committed costs — spend the business had incurred but not yet posted — had to be included in the picture.
- Re-entering transactions into a separate cost ledger was not acceptable.
- Every stage from enquiry to invoicing involved different stakeholders needing time-critical information.
Project Accounting, plus the Customizer module.
Matcon reviewed Access, Exchequer, Sage, SAP, Deltek and Epicor. They chose DataFlow.
DataFlow won on two counts. First, the breadth of functionality needed to manage Matcon’s complex business processes — from initial enquiry, quotation and order through to production, delivery and invoicing. Second, the power of the Customizer module, which allows the solution to be tailored without altering the underlying source code.
With DataFlow in place, Matcon monitor projects in detail from first enquiry to completion while keeping control of gross margins. The Web Reporting Tool gives both in-house and remote users a streamlined way to analyse and present management information in the format each stakeholder needs.
- Project costs captured once and viewed through a project lens, not re-keyed into a second ledger.
- Committed costs included, so projections reflect what the business has actually taken on.
- Flexible project structure covering simple and complex contract processes.
- Flexible cost and revenue recognition, with cost and gross margin figures always in view.
- Integrated CRM, CAD, Bill of Materials and Timesheets feeding the same records.
Cost over-runs spotted while there is still time.
Faster, better-quality management information at both summary and detail level.
John Aird is direct about what the system prevents: “Taking profit too soon on a project and being hit by a cost over-run at the end is a disaster. Not only do you lose the profit you were expecting to make, you also end up writing back some of the profit you’ve already taken. DataFlow helps us to avoid this.”
The business now sees all project costs in one place, with the accuracy needed for reliable projections, and duplication of processing has been eliminated because data is entered only once.
| Outcome | Before DataFlow | With DataFlow |
|---|---|---|
| Project cost view | Separate in-house job costing system | Project lens over the financial ledgers |
| Committed costs | Outside the reported position | Included in projections |
| Data entry | Re-keyed into a separate cost ledger | Entered once only |
| Margin visibility | Late — often after the over-run | Cost and gross margin always in view |
| Management reporting | Assembled by hand | Web Reporting Tool, in-house and remote |
There’s only one good financial accounting system in the market for project-based businesses who want to monitor and control the expected final costs on their projects… that’s DataFlow.
What Matcon run.
Project accounting joined to the ledgers, the bill of materials and the timesheets behind it.
Want margin visibility while you can still act on it?
- No sales pitch
- 30 minutes
- We’ll ask about your business first
Thank you
Your request has been received.