Construction Project Management

Construction Project Management

It is little wonder that companies are looking to replace their basic accounting with Construction Project management Software when you examine what is required to manage a construction project today.

Construction Project Management commences with managing the startup activities for a new project. These include establishing the construction budget and risk checklist. The detail should reflect our approach so there could be multiple stages for specific cost allocations.

Claims Schedules

A Claims Schedule should be established in the Accounts Receivable and this would vary depending whether the contract was Lump Sum, Construction Management or another form.

Purchase Orders

Next raise purchase orders for commitments, starting with the preliminary cost allocations such as huts and sheds. Best practice would be to work through a review process of all budget allocations.

Subcontracts

Subcontracts would be raised after appraising the bids submitted for each Trade allocation. Their preferred basis for contracting, being either bank Guarantees or Retentions would be noted and these details recorded remembering that different subcontractors may possibly have different retention rates. A Claim Schedule would be prepared and supplied to each Subcontractor. 

Insurances etc

The Contracts Administrator needs to monitor whether subcontracts have been signed and returned and also if the subcontractors insurances are up to date. Plus Work Method Statements (full & partial) need to be recorded.

When any additional work is identified for a subcontractor, you raise amendments to their subcontract and possibly Variations to the Head Contract.

Progress Claims

Throughout the life of the project the construction project management team would make progress payments to subcontractors and account for the retention withheld unless Bank Guarantees were in play. If the subcontractors claims bore a statement invoking the “Security of Payments Act” then payments need to be completed with 10 days. Any part of a claim that is rejected requires a reason be given.

After the Project manager approves the Progress Claim a Recipient Created Tax Invoice would be prepared along with the payment.

Client Project Review Meetings

Project Managers would have regular client project review meetings where Variations would be submitted, project progress updated and Billing Worksheets explained and presented for approval.

At Project Completion, the project manager would arrange for Final Certificates to be prepared and a portion of retentions would be paid to subcontractors.

The management of retentions, progress payments, project reviews and the work of contract administrators is greatly enahnced if the construction project management team is using a specialised Construction Accounting Software solution such as Muli.

Accounting Software Comparisons

 

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