TAG | The Accounting Group | TAG provides outsourced accounting and software for the construction industry. As part of the Construction Financial Management Series, TAG hosted "Job Costing and Accounting" for the San Diego Chapter of the Association of General Contractors. visit www.teamtag.net to learn more about services for the construction industry.
2. TAG supports and strengthens your companyâs accounting department
and management with outsourced bookkeeping, controller, and CFO
services.
Whether you are a CFO who could use a quality controller once a
week, a controller who needs bookkeeping assistance, or an office
manager looking for higher level finance and accounting oversight, TAG
can fill the need.
From sales to implementation, training to consulting, TAGâs team of
certified consultants work to improve your efficiency and reporting
capabilities with the best accounting software for the building industry.
TAG is a an Authorized Reseller with a team of Certified Consultants for:
â˘Sage 300 Construction and Real Estate (Timberline)
â˘Sage 100 Contractor (Master Builder)
â˘Sage Estimating
â˘Contractor V
Beyond the NumbersâŚ
TAG provides valued financial and business resources &
counsel for companies and individuals on the move.
3. January 30, 2014 - Understanding Your Construction
Financial Statements
February 27, 2014 - Job Costing & Accounting
March 27, 2014 â Banking & Bonding Management
April 24, 2014 â Tracking your Field Production
May 29, 2014 â Best Practices in Construction
Accounting Software
June 26, 2014 â Construction Financial Management
Boot Camp
4. Purpose:
The primary purpose of accounting is to provide a
system for tracking the financial activities of a business
and to provide management with meaningful and
relevant information to make business decisions. The
secondary purpose is to provide financial information to
third parties regarding the financial position of the
business.
5. Accounting Cycle
The accounting cycle is usually twelve monthly
periods within a year. A Corporation can choose a
calendar year or a fiscal year, however an individual,
partnership, or S Corporation typically uses a
calendar year.
6. Keys to Accounting:
There are a few keys to accounting that can help to
provide an accurate and relevant accounting system
such as:
KISS (Keep it Simple Stupid!)
Cash Is King
Billings are Money
Accounts Payable Process
Payroll Processing
Reconcile and Review
7. KISS (Keep it Simple Stupid!):
There is no need to overcomplicate the process. If
you donât understand how itâs working, you wonât
understand what itâs telling you. Keeping this in mind
may also keep the cost to produce the information
much more manageable. An inexpensive system
such as QuickBooks may accomplish the objective
instead of a more powerful and expensive program.
8. Cash is King
Accounting for the money received and the money
spent will accomplish the major portion of the
process. Reconciling the bank account activity to the
accounting records on a monthly basis will help to
ensure that all cash activity has been captured.
9. Billings are Money:
Timely and accurate billing is the key step to creating
cash. Billing should be done on a regular basis and the
collection of those billings should be closely monitored.
10. Accounts Payable Process:
Nobody likes to pay out money, however the worst part
is paying bills you didnât think you owed (like taxes).
Payables that are not processed timely and accurately
will result in: billings being processed late; planning and
budgeting will be useless; and unwanted surprises that
persist.
11. Payroll Processing:
Determine how payroll time will be collected, whether
manually, using a time card or electronically, using
various mobile time collection technology.
For accurate job costing, payroll must be entered with
job and cost code detail. With this information you will
be able to run various labor production reports.
12. Change Orders:
The proper use of change orders are important to job
costing. Keeping you budgets up to date by entering
changes to your scope of work (change orders) will help
you analyze where you excel and/or where
improvement is needed.
13. Reconcile and Review:
Cash, investments, accounts receivable, accounts
payable, credit card liabilities, and other significant
balance sheet accounts should be reconciled to a third
party statement on a monthly basis. The activity in these
accounts and the overall financial statements should be
reviewed on a monthly basis for reasonableness and
used as a basis for planning and for making business
decisions.
14. Users Of Financial Statements:
Besides management, there are other people or
organizations that request and/or review the financial
statement of the company. A few examples are as
follows:
⢠Bankers
â˘Surety Company
â˘Shareholders
â˘Tax Agencies
15. Purpose:
The purpose of job costing is to provide
accounting of contract performance and to
assist in managing the job, as well as to
provide management with relevant information
regarding contract activity in order to make
business decisions .
16. Contract Cycle:
Contract cycles can vary significantly from
contract to contract as well as from the type of
work performed. Shorter contract periods may
make the job costing process a little more
difficult, but no less important.
17. Keys to Job Costing:
The âkeys to accountingâ previously discussed also
applies here, however, there are a few other issues to
consider such as:
Identify Key Cost Components
Tracking Cost Components
Performance Measurements
Monitor Results
Make Adjustments
18. Identify Key Cost Components:
Labor, materials, equipment, subcontractor costs are
the typical components of job costs. Identify any other
significant costs that relate to your contract
performance. These would typically be the same costs
you estimate in the bid process.
19. Tracking Cost Components:
Determine a method to track the costs by job keeping in
mind the keys to accounting discussed above.
Consideration should be given to the accounting system
in place and its ability to generate and/or track cost flows.
Include bid and revised estimates within the job cost
system.
20. Performance Measurements:
When designing the system, consideration should be
given to including performance criteria within the job cost
system. Items such as pounds/yards, etc.; per man
hours; material per square foot, etc. These performance
measurements may provide you with additional
information as to job performance outside the typical
cost information.
21. Letâs review some common reports used to
track Performance Measurements of the
core components of Job Cost.
22. Monitor Results:
Review the results on the job to assist in evaluating
performance, as well as assist in estimating future bids
and making business decisions.
23. Make Adjustments:
As the business and/or the jobs change, the job cost
system may need to be modified to meet the new
changes. If youâre monitoring the results on a regular
basis, the adjustments needed should come to light
24. Accounting & Job Costing-
Rule of Thumb Strategy:
1. Keep the accounting and job cost process simple.
2. The information produced should be relevant and
understandable.
3. Review and use the information to make individuals
accountable and to make business decision.
4. Accounting and job costing are not the answers but
they can assist in getting you the answers.
25. January 30, 2014 - Understanding Your Construction
Financial Statements
February 27, 2014 - Job Costing & Accounting
March 27, 2014 â Banking & Bonding Management
April 24, 2014 â Tracking your Field Production
May 29, 2014 â Best Practices in Construction
Accounting Software
June 26, 2014 â Construction Financial Management
Boot Camp