CONTRACT COSTING

A component part of Intech’s PYRAMID Suite

Overview
The Contract Costing module is an integral component of the Intech PYRAMID Contract Management
suite of applications. Contract Costing resides beneath the Transaction Entry module and integrates
directly with Accounts Receivable, Accounts Payable and General Ledger. All four modules are required
to form a minimum PYRAMID configuration.
The primary function of the Contract Costing application is the financial and project management of
contracts. It is widely used and suitable for construction companies, shop-fitters, property developers,
local authority trading enterprises, roading contractors, sub-contractors (including air-conditioning, ceiling
and interior fit-out companies) as well as project managers.
Upon acceptance of quotations complete contract details can be established. Contract Costing has the
ability to import estimates which have been prepared via third party software. These can be held in
summary form, or they can be broken down to a detailed work-centre level. Costs are commonly entered
as they are incurred. Progress and final claims are generated so that full financial reporting is available at
all levels.

Features of the System

Detailed Analysis: Full Transaction detail is maintained from the commencement of the contract to the
current date. Cost and revenue elements are analysed into categories for materials, labour and sub-
contractors.
Multi-level reporting: Contract information is available as required at varying levels of detail for the
purposes of both estimating and monitoring work in progress. Summary reporting and inquiry facilities are
also available.
Percentage Complete: A large proportion of the available reporting is based on a ‘percentage completion
factor’ and calculates estimated costs to complete together with estimated profitability.
Sub-Contractor Reporting: Information is stored to enable reporting on sums claimed, certified and paid
as well as the varying types of retentions held for each contract and sub-contractor over the life of each
contract.
Self Billing Invoices: Once sub-contractor claims have been authorised, self billing tax invoices can be
generated.
Payments: A cheque authorisation schedule which summarises payments due to subcontractors can be
printed. Payments to be with-held (if any) are entered and cheques / remittances are then printed.
User Defined Reporting: Up to 99 different report layouts can be established on a user-specific basis.
User defined reports can supplement the standard pre-formatted reported that are available.
Variations: An optional ‘variations’ sub-system is available. This module tracks variations or chargeable
‘extras’ that fall outside the contracted price and controls recovery of the additional costs.
Integration: The Transaction Entry module provides seamless integration with Intech’s Creditors /
General Ledger, Cashbook, Fixed Assets, Debtors, Payroll and Labour Cost, Estimating and Quoting,
Stock Recording, Plant & Property and Purchase Order modules. There is an interface for third-party
Estimating software.
Notes: Free format ‘notes’ can be attached to Contracts and Sub-Contractors.

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Maintenance Data
Contract Details: Each contract is identified by a code of up to 6 digits. This need not be structured in
any pre-determined way as there are several selective criteria that can be used for reporting purposes.
Contract records are held in two parts. Firstly, the header details include descriptive information, reporting
classifications and estimated start and end dates. Secondly, the contract record is used to establish
estimated costs by work centre and type (for example labour, materials, plant, sub-contractor or revenue).
Variations: Estimates can be viewed and revised for each contract, as required.
Completion Estimates: Estimates can be entered at a cost summary level for both materials and labour.
These estimates, which are based on the percentage a contract has been completed, are then used to
calculate the cost of completing the project.
Sub-Contract Maintenance: Separate details are maintained for each sub-contractor on a contract.
Information as to the value of the contract, total claimed, total paid, retentions and GST are maintained.

Transaction Data
All transactions are injected into the system via the Intech Transaction Entry module. Transactions can
come from a variety of sources which include:
Purchase Orders: Anticipated costs can be picked up at the point the purchase order is placed with a
supplier. This avoids delays that can otherwise occur if details are only entered once an invoice has been
received and approved for payment.
Creditors Invoices / Credit Notes: Material costs are picked up from creditor transactions. Actual
material costs relating to a contract are charged to that contract at the time the creditors invoice is
processed.
Labour: Labour hours and costs can be extracted from the payroll module or entered from time sheets on
a daily basis. The hourly labour cost that is charged to jobs can be calculated by one of several different
methods that are available.
Plant: As plant items are used on a contract, charges are generated against the contract cost centres
based on the time used extended by the charge out rate.
Inventory: Inventory items issued from the store for contracts are debited to the contract cost centre at
the appropriate cost.
Sub-Contractor Claims: As claims are received from sub-contractors they are entered against the
appropriate sub-contract. The amount to be paid and retention to be with-held is then calculated and
entered.
Client Claims: Progress and final claims are processed with a tax invoice being generated once these
have been authorised and payment has been received.

Financial Documents
Trial Balance: This can be printed selectively for Month-to-date, Year-to-date and Life-to-date balances.
Detailed Ledger: A detailed ledger can be printed, as required, for all or selected contracts and work
centres.
Cash Forecast Summary: This report shows forward payment commitments and anticipated revenue
receipts per contract.
Billing Report: The billing report lists all material, labour, plant and sub-contract costs relating to a
contract and adds the applicable overhead and margin percentage. The resultant calculation provides a
recommended billing value.
Tax Invoices: Tax invoices in respect of client claims are available to be printed.

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Management Reports
Contract Advice: This report is a three part document which sets out a heading page giving contract
details followed by a grouping of costing records by work centre and finally sub-contract creditor details.
Progress Claim Forms: These are designed as ‘turn around’ documents to assist in the preparation of
contract claims.
Labour Estimates Form: This document can be used as a basis for labour estimate revisions.
Contract Summary: The Contract Summary report shows totals for labour, materials, sub-contractors
overhead, revenue and profit-to-date for each contract.
Costing Summary: Projected costs and revenue are shown based on completion estimates.
Labour Analysis: This shows labour actual and budgets (both value and hours) together with an estimate
to complete.
Outstanding Purchase Orders: When the Purchase Order module has been implemented any
outstanding purchase orders relating to jobs that have been flagged as complete will be shown.
Work in Progress Summary: This report can be produced selectively based on one of the optional
valuation methods that have been specified for the ledger.
Formatted Reports: Up to 99 reports which can be user-defined in layout are available,

Sub-Contract Reports
Claim Analysis: This listing is designed as a ‘turn around’ document to assist in the input of future sub-
contract claims.
Trial Balance: The sub-contract trial balance can be printed in contract or creditor sequence for all or
selected sub-contracts.
Detailed Ledger: The detailed ledger provides a line by line listing of all transactions which make up each
sub-contract account balance.
Cheque Authorisation Schedule: Prior to printing cheques a schedule can be produced for authorisation
purposes.
Cheques and Cheque Register: A choice of cheque / remittance advice formats is available. After
cheques have been produced the cheque register can be printed.

Inquiry
Contract Inquiry: This inquiry functions on a ‘drill down’ basis. The contract can be viewed at a high
level in summary form. It is then possible to select work centres and display individual transactions.
Sub-Contract Inquiry: Selection by either contract or creditor is possible. Claims, retentions, payments
and the balance outstanding are all displayed. Any free format notes that have been recorded against the
sub-contract can also be viewed.

Contact Details
For further information relating to the CONTRACT COSTING module which is a
component of the Intech PYRAMID Application suite
Please contact our Customer Services Director

Graham Jones Telephone +64-3-4779604

P O Box 5072 Fax +64-3-4790320
Dunedin 9058 email: sales@intechsoftware.co.nz
NEW ZEALAND

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