Construction in Progress

Introduction

Construction in Progress (CiP) can be a challenging area to track in traditional finance systems, which may lack the flexibility to apply costs to an asset or overall project, leading to teams creating their offline methods to correct for this type of project.

Cloud accounting can allow the flexibility to support CiP projects and allow accurate ‘real time’ recording and reporting.

Typical Problems

Often, a traditional finance system only allows a value associated with CiP to be recorded via journals, meaning the value is based on additional calculations, conducted outside of the system. This means teams have multiple data sources to keep up to date, and multiple places to review for information. There is often no way to record the detail that makes up the cost of the CiP, and reporting may be limited, for example to a value on a General Ledger or Nominal code.

Solutions

Cloud accounting not only allows the recording of the CiP but also allows automation of the journal postings required for valuation, meaning data can be kept up to date.  Recording the items that make up the CiP is easy, with the ability to remove or add items as required.

Powerful analytics tools allow for reporting on both the overall valuation and several detailed dimensions relating to the CiP including cost, cost to date, and hours worked.  As with all the reporting in the cloud accounting system, this can be set to be emailed on a schedule as well as interrogated on-demand.

Benefits/ROI

Cloud accounting systems allow for the autonomy of postings, allowing users to design posting frequencies and schemas according to the specific requirements of the organisation.

This saves time spent posting manual journals and makes it easier and more efficient to maintain and access a breakdown of the CiP and generate accurate snapshots of the current costs and value of the items, and the CiP overall.

Automated and scheduled reports can be set up to keep key stakeholders informed, with insights delivered directly to inboxes on a custom schedule.