How are you tracking Committed Costs for Labor, Materials, Subcontracts in Sage 100 Contractor?

SOLVED

Hi,

Below are the qualifications and context of the question to follow:  If you are not a Construction Company tracking Committed Costs for WIP and Estimated Cost to Complete then the following may not be relevant.   If you are a Construction Company who utilizes Subcontracts, PO's, and Committed Cost Reports in Sage100, please read on.

We are using Sage 100 Contractor with the Estimating and Project Management Modules.   We also apply Periodic Percentage of Completion (PoC) over/under billings adjustments to our income statement to adjust our Monthly Gross Margin.  We use an .xls based Work in Process (WIP) worksheet to calculate the Over/Under Billings by job.  They key to this calculation is determining the "Estimated Cost to Complete"  which is an equation dependent on committed and current job costs.

There are 3 primary areas that we need to track our Committed Costs, and Sage provides some tools for integrating this practice:

1. Tracking Committed Labor Costs: We use SAGE Construction Anywhere - this feeds unbilled, uncomputed labor hours and dollars into job cost reports as Current Job Costs.

2. Tracking Committed Subcontract Costs:  We assign Subcontracts to jobs by assigning a Vendor in the Takeoff in Sage Estimating. When the Takeoff is exported to a Budget, Subcontracts are created by Vendor with the Budgeted Totals.   When AP invoices come through from our Subcontractors, the Invoice is keyed to the Subcontract so that the Committed Cost report shows the net difference between the original Subcontract amount and the Amount already recorded in Accounts Payable/ Job Costs - giving us Estimated cost to complete for Subcontracts.

3. Tracking Committed Material Costs:  This is the most challenging because we can use PO's or Subcontracts to create a record of the Estimated or Committed Costs, but tracking this in the field is very difficult without having our Superintendents, who are responsible for purchasing materials, call the Office for a Purchse Order every time they need to go to a supplier to get materials.  There are multiple issues with this approach that make it unfavorable.

In order to get our Committed Costs, and therefore our Estimated Cost to Complete adjustments, we need a PROCESS or BEST PRACTICE that we can use get all three of these data points by job.  So here is the question:

How do you track in Sage the Committed Costs for job Materials without waiting for the material supplier invoices?  

*Our Objective is to catch potential Material Cost overages BEFORE we receive the material invoices from our suppliers (usually a couple weeks to a Month after purchase) so that we can accurately estimate cost to complete.  

Have you found a process using PO's or Subcontracts for tracking Materials that would make it easy and efficient for Field Superintendents/ Work Leads to report their job material purchases?

If you have any ideas or if you have a process of your own that provides for accurate committed cost tracking for materials, we would like to talk with you.  Please feel free to call me at 206-455-9110 x301 or respond via post.

Thanks for your time-

Ambrose Construction
Joe S.

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  • 0
    verified answer

    Hi Joseph

    If the pricing on your origijnal PO's is accurate, you could create invoices in 4-2 with a status of 2=review for items you have received in the field based on quantities on the picking tickets/delivery recepts that your field people have signed for.  This is similar to "receiving inventory" at time of delivery and then matching up the actual AP invoice with the invoice that is "in review"  in the system.

    You could also create temp invoices from the vendors based on calls from the superintendent letting you know what he purchased and from who.  If you aren't currently using a PO system to authorize purchases, then your superintendents should be getting the prices for the things they are buying at the time they order them.  Then just enter a temp AP invoice in "review status" until the actual one comes in.

    If you can't create PO's or temp invoices with pricing ahead of time, then reach out to your high dollar suppliers and request quicker turnaround on their invoicing.  

Reply
  • 0
    verified answer

    Hi Joseph

    If the pricing on your origijnal PO's is accurate, you could create invoices in 4-2 with a status of 2=review for items you have received in the field based on quantities on the picking tickets/delivery recepts that your field people have signed for.  This is similar to "receiving inventory" at time of delivery and then matching up the actual AP invoice with the invoice that is "in review"  in the system.

    You could also create temp invoices from the vendors based on calls from the superintendent letting you know what he purchased and from who.  If you aren't currently using a PO system to authorize purchases, then your superintendents should be getting the prices for the things they are buying at the time they order them.  Then just enter a temp AP invoice in "review status" until the actual one comes in.

    If you can't create PO's or temp invoices with pricing ahead of time, then reach out to your high dollar suppliers and request quicker turnaround on their invoicing.  

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