Page 319 - TCDB combined Book

298 The Complete DESIGN BUILDER

Cost Accounting:

The necessity of implementing and maintaining a Cost Accounting System cannot be over-
emphasized. Eliminating the uncertainty and guesstimating for certain items during the estimating
stage will allow you to produce accurate and consistent estimated costs. The fully Integrated
Accounting Systems that have a Job-Cost Module and keep you up to date on actual costs will be
the most advantageous. Due the variables in project size and complexity we offer the following
methods for cost accounting and tracking your actual costs.

Manual Index Card Method

Computer Based Method

Manual Cost Accounting:

As payroll, payables and receivables are processed the Job-Cost Coding System will
designate the appropriate card for the entries. A series of index cards based on the Masterformat
System would be created for each project, upon completion of the final contract budget and
schedule of values. On each individual card covering the phase of a main division the budget
amount allowed would be entered in the credit column. As payroll costs and payable expenses are
processed, coded and approved the individual entry amounts would be entered in the debit column
and deducted from the budget amount, leaving a current balance. The advantage of this system
would be the early detection of budget amounts that have been exceeded or a discrepancy that
must be investigated. The disadvantage of this system will be the labor intensity of making the
entries and calculating balances. Due to the higher cost of Computer Based Integrated
Accounting Systems that will automatically provide this detailed breakdown, a Manual Card
System or similar method is vital for the smaller operation that cannot justify the expense of the
more complete accounting systems. Updating this Card System when Change orders, adjustments
or allocation discrepancies occur is an important step in assuring accuracy and current balances
are always available. The initial set-up of this Manual Card System requires detailed work and
close attention to the task of entering payables as they are processed. The key point is to process
the invoices as they are received and not allow a large volume of items to accumulate.