Budgeting in construction companies Cell phones

Budgeting in construction companies Cell phonesFor many businesses, including construction, budgeting is one of the most complex areas in the company. The difficulty lies in the fact that the budgets of even medium-sized companies represent a dataset consisting of sums and articles that are assembled into a single unit. The budget, in fact, is the integrated document, which is not reflected nor the lists of works, nor any of their terms and the types or conditions of contracts, etc., the Base budget is the set of initial data (contracts, applications, budgeting, planning their own activities of the enterprise, graphs). Budget also has a lot, and one contract may contain items (a list of services and works), which belong to different items of the budget. Of course, in business statics prevails rarely, and only in the construction business. And when the budget needs to be revised to meet in construction companies quite often. For example, one of the most common cases is the need to adjust the budget construction company, based on the specific contract. Under the contract, the validity of which was defined in the beginning of the year, for example, the situation in a few months can change (transfer deadlines or changing schedules of funding, and so on). A similar situation in the construction business are common and, accordingly, the budget in such cases must be corrected. Some construction companies are trying to establish a budgeting system, but all the stops due to the fact that to achieve this goal you need a whole team of experienced economists, who will not only budget, but also to maintain it up to date. In the budget we need to make adjustments based on changes relevant to a specific contract that manually is very difficult to do physically. As mentioned above, contracts in the construction companies, there are a lot, and given the fact that the work and services contained in the contract, can be referred to different items of the budget, budget adjustments will simply be a daunting task for staff. Typically, such a duty is placed on the unit, whose competence is not part of the solution of tasks related to budgeting (e.g., accounting). It is clear that the construction company will not hire a staff of economists for budgeting and keeping it up to date. As a result, the budget is simply "how it goes". The terms of contracts in construction are changing quite rapidly, sometimes there are force majeure. Changing deadlines is also characteristic for the construction business. For example, the contractor (construction company) sometimes does not comply with the deadlines for various reasons. The project, which was initially planned for two months, may last for four months. It is easy to guess that in this case should be allocated additional funds for the maintenance of the grounds, pay other miscellaneous expenses and so on. Thus, the budget originally adopted shall be changed. Otherwise, its "collapse" can lead to the loss of the construction company, because the real situation is uncontrollable and incomprehensible. As soon as he changed the terms of the contract or its implementation, you need to make adjustments to the budget and to recalculate the amounts for the items. But to calculate the sum of even one article you need to raise all of the primary documents. In the end, need to check all agreements of the company, which can be more than one hundred. According to many construction companies to conduct budgeting manually is extremely difficult. "Construction companies are really interested in the fact that the budgets were built correctly and, if necessary, change them, were relevant and clearly demonstrated how much has changed and what caused the need to adjust," says the developer. Given this trend, in ALTIUS - construction Management", which is a major development company "ALTIUS SOFT" for the construction business, you best to organize the work in the field of budgeting. Budgeting in the program is constructed using two intermediate documents: for budget revenues and expenditures in this document is "a Plan to execute, for cash flow - "Financial plan". Despite the fact that these documents are intermediate, they have independent value. They are the basis for making operational decisions, because clearly demonstrate the formation amount in the article (of any documents), what adjustments were made, their sequence, the list of contracts and articles on which the change occurred. When you change important conditions of the contract specialist construction company, responsible for budgeting, program will generate an automatic message about the data changes. If the specialist feels that this change is significant, it should make them "plans" and "Financial plan" (one click). As soon as the adjustments will be recorded in these documents, they will automatically be transferred to the budget of the enterprise and, thus, it will be adjusted by pressing a couple of buttons. The user will see, just by clicking the mouse, comparison of planned and actual indicators and in the "Plan of implementation", and "Financial plan", which is very important for budget adjustments. In these documents you will see the reason why this or that amount, the date was changed, what was the source of the adjustment. The program will be divided amended and originally recorded data, and based on this you will be able to take prompt management decisions. Thus, in ALTIUS - construction Management budgeting is built automatically based on the "plan of implementation" and "Financial plan". These idocs are a budget that is deployed to the end of the operation, i.e., it is the most detailed, but you can see MDD and budget and in classic view. According to the developer, this functionality is necessary for construction companies, because from the correct changes to the budget depends the fate of many projects. Often the head it is unclear on what basis adjustments budget: there has been a change in the cost of materials or changed the terms of the contract, or the budget of the previous period is not actually performed, etc. In the same program, you can see the staging, staged picture showing what happened before: "the chicken or the egg" - one amount or another. "Budgeting is very important to follow the real objective data and not to make detective, figuring out why the money under the contract consumed later or earlier, there's never any nuances. Indeed, the budget is one of the most important aspects in the construction company and manage this aspect is not easy. We came to the conclusion that using task budgeting should be resolved simply and quickly. In the intermediate documents ("plans", "Financial plan") will be recorded all the detailed information about the corrections, the sequence of their application, and further these adjustments will be transformed directly into the final budget. If necessary (and it will occur), the Manager will be able to see what changes to the budget were made, by whom and for what reason that will save both time and money building company. Budgeting is a very powerful instrument for reducing the risk of financial problems at the construction company. However, many construction companies do not use this tool because of the difficulties encountered in the course of its development and subsequent support. The use of the program will not "inflate" the staff and make budgeting actual practice", - says the General Director of company "ALTIUS SOFT" Andrew Travkin..

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