Site icon Muli – Construction Accounting and Project Management Software

Earned Value General Ledger

Project Accounting

Muli construction accounting software aims to focus your management of short term liquidity as opposed to true, long term profitability.

Muli provides a management focus on short term liquidity and long term profitability. We find many new clients have dramatically overstated profits and hence paid too much tax.

Muli treats each project:

  • as a stand-alone subsidiary of your company.
  • as making a contribution to overheads, in each accounting period.
  • as having a liquidity relationship to the parent company – as a source and user of funds.

Muli’s approach to construction accounting;

  1. Systematically track ‘income‘ and ‘expenses-to-completion’ to forecast a project’s Gross Margin.
  2. We then calculate what Percentage of a project is complete (as work ‘approved’ over ‘final forecast’ invoices).
  3. Each project thus contributes ongoing “Earned Value” to the company (‘Gross Margin‘ x ‘Percentage Complete‘). Generic accounting/Spreadsheets fall short on accuracy in this area.
  • We believe that only once Project Contributions exceed Company Overhead Expense, then a company makes Profit.
  • Muli’s process ensures risk is properly verified, so projects accurately report their earned value.
  • The key is to clearly define ‘pre-payment liquidity’ from true, earned value profitability over long-term/multi stage construction projects.
  • Muli’s reports give a clear review of your contracts which are sustainable in risk and liquidity terms.

Muli is an earned value project management solution, because it applies the principles of “Earned Value Accounting” which requires a clear recognition of all financial obligations required to be met to complete the project.

MULI TRIAL BALANCE

Muli doesn’t create a General Ledger by maintaining rolling G/L balances. Instead, to give managers more flexibility, Muli uses the underlying Accounts Payable and Accounts Receivable transactions to generate the G/L Trial Balance for a given accounting date.

CLEAR PICTURE OF WHERE THE BUSINESS IS AT

The Muli Trial Balance analyses, for the given date, each project and all G/L accounts for:

  • approved
  • paid
  • A/R invoiced and received
  • the recognised contribution for active projects
  • Real Work in progress Assets or Work in progress liability
MONTHLY CONTRIBUTION MAINTENANCE

The general ledger processes the contributions on a monthly basis; however management would have used the Project Review Cost & Process routine as the basis for predicting the gross margin expected from the projects.

By taking the value of the work approved over the final forecast cost they arrive at a % complete, which is then applied to gross margin, to provide a default, (but adjustable) earned value.

BAS – TIGHT AUDITABLE GST MANAGEMENT

Muli have implemented GST as a separate element of the accounting transaction enabling a transaction to be dealt with in the required accounting period – but reported in the next available BAS return.

ACCRUAL BASIS

All accounts are prepared on an accrual basis. Muli does not support cash accounting.

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