Contract Accounting Ledgers

Our App offers a set of two contract ledgers, namely a summary and a detailed ledger. They are specifically designed to gather all project costs, such as materials, labor, sub-contracting, and other expenses. The detailed ledger module is fully integrated with our BUY, SELL, and PAY modules, which automatically post transactions related to the project onto the ledgers.

In addition, the Summary Ledger allows you to generate new project entries. Simply click the "Create New Project" button located at the top right corner of the Summary Ledger to initiate the process.

After creating a project, you can start entering costs into the detailed ledger by clicking on "Project Costs" in the Action Menu. To add an item to the detailed ledger (shown below), simply click on "Add Item" and choose the corresponding cost category from the drop-down menu. This allows you to enter transaction details in real time as they occur.

To assign staff to a project, navigate to the summary ledger and select "Project Staff" from the Action Menu. "Project Staff" refers to employees, either permanent or contracted, whose salaries and benefits are paid and charged to regular Salaries & Benefits account through the company's payroll. These staff are billable and must log their hours worked on the project using a time sheet.

Sub-contractors are categorized as any individuals who are specifically employed for a project under a contract of service and are paid via an invoice. Their costs are charged directly to the project. In some cases, sub-contractors may include companies that are contracted to perform a specific task within the project.

And from the staff roster select “Add New Project Staff” button to complete the details shown in the form below.

To input working hours for each staff according to their timesheets, select "Working Hours" from the Action Menu in the Staff Roster, and enter the number of hours worked.

Our App features an automated charge account function. Items purchased through the BUY module are automatically charged to the Contract Asset account. Similarly, items or services paid for without a purchase order via the PAY module will be debited to the Contract Asset account. Other costs added directly within this project module will be accrued as Accrued Project Expenses and debited to the Contract Asset account.

When an invoice is issued upon reaching a payment milestone, all costs incurred up until that point will be transferred from the Contract Asset account to the Cost of Sales account. However, if necessary, you can adjust the transferred cost by intervening at “Charge Account Confirmation” in the Action Menu.

The billable amounts for staff are recorded as a debit to the Contract Asset account and a credit to “Billable Cost of Staff”. While this amount can be used to offset salary costs, we believe it can also serve as a measure of staff productivity in generating revenue.