Lesson 3: Construction Software Accounting System Flashcards
Manages your projects, resources, and financials from project planning to closeout.
All-in-one construction management solution that connects field teams, office administrators, and developers in one platform.
Used by property developers, project managers, general/specialty contractors, and architects within the construction industry.
PROCORE
A centralized software platform that tracks all financial information.
Examples: Quickbooks, SAGE300, SAP, Accumatica
ACCOUNTING SOFTWARE
It’s a system that helps business to manage day-to-day activities such as accounting, procurement, project management, risk management and compliance, and supply chain operations.
ENTERPRISE RESOURCE PLANNING (ERP SYSTEM)
Construction Software
CREATE PRIME CONTRACT AND BILLING
CREATE PO
Accounting Software
CREATE CUSTOMER
CREATE BILLS
COPY PO
CODE INVOICE
Construction Software
UPDATE PRIME CONTRACT PROGRESS FOR THE PROJECT
UPDATE PROJECT COST AND REMAINING BALANCE OF PO
Invoice Approval System
THIRD PARTY INVOICE AUTOMATION SYSTEM
INVOICE AND EXPENSE CAPTURE
AUTOMATED ROUTING FOR APPROVAL
AUTOMATIC PO MATCHING
VARIOUS LEVELS OF APPROVAL / APP
AUTOMATION POSTING TO ACCOUNTING SYSTEM
EXAMPLE: SAP CONCUR, TIMBERSCAN
Financial statement ratio
LIQUIDITY RATIO
LEVERAGE RATIO
Liquidity ratio
CURRENT RATIO = CURRENT ASSET / CURRENT LIABILITIES
IT MEASURES THE ABILITY TO COVER ITS SHORT-TERM DEBT WITH ITS CURRENT ASSETS.
CASH RATIO = CASH + CASH EQUIVALENTS / CURRENT LIABILITIES
CASH RATIO MEASURES A COMPANY’S CASH ON HAND.
Leverage ratio
DEBT/EQUITY RATIO = DEBT/EQUITY
IT MEASURES RISK LEVEL TOLERANCE OF A BUSINESS.
THE HIGHER THE RATIO, THE MORE RISKY THE BUSINESS IS TAKING ON.
A LOWER RATIO CAN SUGGEST THAT THE COMPANY IS NOT TAKING ADVANTAGE OF DEBT TO EXPAND.
Efficiency ratio
AR TO SALES RATIO
AR TURNOVER RATIO
AR to Sales Ratio
HOW MUCH SALES ARE MADE ON CREDIT VS. CASH
INDICATIVE OF A COMPANY’S RELIANCE ON CASH
CAN BE USED BY CREDITORS TO DETERMINE DEBT PARAMETERS
ACCOUNTS RECEIVABLE / SALES
AR Turnover Ratio
IT MEASURES HOW EFFECTIVELY A COMPANY IS EXTENDING CREDIT AS WELL AS COLLECTING DEBTS.
NET RECEIVABLE SALES / AVERAGE NET RECEIVABLES.
It measures the average number of days a client takes to pay their bills.
Its shows the effectiveness of the credit and collection policies.
Average Collection Period = 365 days * (average accounts receivables / net credit sales)
COLLECTION PERIOD
It measures how efficiently a company is paying its suppliers and short-term debts.
It shows how many times a company is paying its suppliers and short-term debts.
AP Turnover = Total purchases / (Beginning AP balance + Ending AP balance )/2
Ideally, a company wants to pay off its AP quickly, but not too quickly that it misses the opportunity to use the funds to invest.
AP TURNOVER RATIO
