Everything in Muli construction accounting software is managed by a Project – even the Muli General Ledger is a project in its own right (for the financial year).
Each project is reviewed for:
- Short Term Cash Management
- Long Term source or use of funds / profitability
Muli has implemented a process that is Australian Tax Office approved and is fully auditable, for determining the earned value of profit or loss emerging from a project.
Construction projects are maintained in Muli, with key details of the Head Contract with your client including:
- Contract Sum & Revised Contract Sum (after Variations are approved)
- Contract type (Lump Sum / Cost Based / Management Fee etc)
- Retention Type (Retention Rate / Bank Guarantee etc)
- Contract signed status
The Project details also include: Stages (Project Management Phases), Timings (Key Dates), People with Key Roles & Marketing data.
The original contract value is entered as the Contract Budget when first loaded. A project framework is used to break the budget down into the items and major elements for purchase orders and subcontracts.
Muli requires the project team to identify the amount of budget in original estimate for scope of working (First stage Cost Report).
The nature of project based industries is such that the value of a variation to the scope of works is often many times the gross margin to be made from the project.
Stringent processes covering a client’s variations and subcontractors’ amendments are vital in achieving effective management control and accurate financial reporting throughout the project’s life.
For variation management, Muli has adopted a framework of:
- Ballpark Variations – raised once a change in scope of works is known
- Submitted Variation – a firm $amount is submitted to the client for approval when the scope of works is quantified
- Approved Variation – upon client approval
Muli requires an Approved Variation before allowing an increase in the Budget amount.
A provisional distribution of variations is permitted as follows:
- expected outcome from budgets may be pre-entered
- are shown on internal reports only
- do not update the adjusted contract value
At the time of distributing a variation to a head contract you can flag updates to individual subcontracts.