What is the difference between eac and bac

Starting with the most basic data gathered in the field, the needs of every team member were addressed. Best practices were incorporated so that the Financial Control and External Reporting remained in the hands of your Accounting team.

The data flows from every source in your company is incorporated into the Executive Level Financial Reporting, Analytics, and Dashboards provided by Corecon. Corecon as Infrastructure There are many benefits to adding Corecon to your existing Accounting and Reporting Systems: Corecon data sources are user content driven. Data is gathered from the individuals working through out your organization and is no longer reliant on any one person interpreting and entering data for the rest of the team.

Corecon is dedicated to continual development, improvement and adding new features. The continual supply of data from all sources allows everyone on your team see the information in a format they need to see it and the level of detail they need to see it.

Corecon provides abundant tools to help anticipate problems, trends, and new income streams. The foresight these projections produce will help you avoid pitfalls and downturns. Corecon provides the financial and management controls needed.

Document Flow and Controls insure your legal concerns are met. Approvals and Authorizations incorporated into these processes are managed throughout the system.

Corecon is durable. With the right amount of initial effort, time and team buy-in, Implementation and Integration is seamless. Training is provided in the form of Live Webinars conducted several times each week and the cost is included in your subscription price. Product Documentation, in the form of Help Articles, is provided online and is updated weekly. Corecon continually monitors, and updates internally based on financial reporting trends, Generally Accepted Accounting Principles and government requirements to meet the needs of most construction related businesses Corecon enables your company to standardize the flow of information which makes comparing multiple projects over time easy and the data is more valuable.

Whether you contact technical support online or by telephone, you can be assured your needs are being addressed by a real living person.

Concluding Thoughts Corecon has been around since and strives to meet your needs. As Corecon continues to develop, their goal is to meet the needs of construction related businesses both large or small.

Corecon is a software company where you have direct access to the original owners and developers of the software which assures you they care. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty express or implied is made as to the accuracy or completeness of the information contained in this publication, and Corecon Technologies Inc, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

Indirect Cost Issues Contract Costs usually include direct costs such as materials, labor, equipment, and subcontract costs incurred and are directly related to the installation and preparation of materials and services incorporated into the final construction product.

Direct Contract Costs are accumulated and are charged to operations as the related revenue from contracts is recognized. Practice varies for certain indirect costs considered allocable to contracts. For example, consider Support Costs such as processing job payrolls, billing, collection costs, bidding and estimating costs. Some authorities require costs to be considered period costs if they cannot be clearly related to production, either directly or by and allocation based on their discernible future benefits.

General and administrative costs ordinarily should be charged to expense as incurred but may be accounted for as contract costs under the completed-contract method of accounting. Selling costs should be excluded from contract costs and charged to expense as incurred.

Non-allocable job costs included expenses for unsuccessful bids and proposals and for marketing, selling, and advertising expenses. These costs are exempted from the cost allocation requirement. In general, contractors using the percentage of completion method are required to allocate indirect job costs to their long-term contracts.

Contractors using the completed contract method of accounting are required to capitalize indirect job costs allocated to long-term contracts until the contract is completed. Some of these principles are determined by the size of your business, the type of work performed, the size of the project, method of accounting or the length of time it takes to complete the project. If these are not appropriately applied, you may overstate or understate your deductions with consequences that affect your tax reporting and audit outcomes.

Ultimately the goal is to recognize the costs at the same time you recognize the associated revenue. Each contract type has in common a previously agreed contract price and reflect a direct agreement with your Owner or your Subcontractor.

The later two types are projected and usually vary in amount. They likely share a similar format, usually at least two pages and include a Summary Application for Payment and a second more detailed Continuation Sheet.

There can also be a distinction between base or original contract and change orders. Change orders are an adjustment in amount, quanitity, and time tracked when a change in scope, change in conditions or addtitional claim occurs. Contract Invoices are a means of communicating a payment request and an indicator of work completed and materials delivered or stored. These payment requests are usually based on a Direct Agreement with your Project Owner or Customer, or between your Company and your Subcontractor.

The total fixed amount is detailed by line items that represent different measurable portions of the obligations set forth in the Base Contract Scope of Work. The payments requested by Schedule of Values line items are based on the amount of costs incurred by the Contractor.

The reality, however, is that the Project Owner or Customer approves the amounts requested for payment and this tends to be a subjective measurement subject to perceived work completed or Materials Stored. Change Orders are billed in a similar fashion and added near the bottom or detailed on a separate page continuation sheet.

In many cases, an architect or engineer is required to certify the payment request before it is considered approved by the Project Owner. The total contract amount is intended to be only an estimated projection of costs and tends to vary from that original amount. The line items on this payment request are detailed as actual costs incurred. Labor may be billed as actual cost incurred, or based on a previously agreed hourly rate detailed by trade, level of experience, or craft code.

Detailed Documentation providing the verification of each cost incurred is attached to the payment request for the Project Owner to confirm. When this occurs approved Change Orders usually document the amounts requested based on a Change in Contract Scope of Work, Dispute, Claim, or other equitable adjustments.

The Contractors Income is considered earned when the costs are incurred. The initial Estimated Quantity is provided, but this tends to be used as a comparable measure to award the contract and as the estimated Contract Amount. In this Contract Type, the Contractor is requesting payment for only those line items and their quantities delivered, installed, or stored. The total contract amount is intended to be only an estimated projection of units and negotiated prices.

These tend to vary from that original estimated quantities. The Contractor is only paid by quantities and the Income is considered earned when delivered, installed or stored. Estimate at Completion EAC is the current expectation of total cost at the end of a project. The EAC represents the final project cost given the costs incurred to date and the expected costs to complete the project.

You may also like. What is Project Business? September 14, September 20, About the author. View All Posts. Project Business Automation Quick Guide. What is Estimate at Completion? ETC can either be determined by building a bottom-up estimate, usually by asking your work package owners, team members, or vendors for revised estimates or by deducting the actual costs AC from the estimate at completion EAC.

You are three months into the five month bathroom remodeling project. You currently are running over-budget, as indicated by a cost performance index CPI of 0. If you learn that the contractor found some mold in the sheetrock and needed to replace it, causing a one-time variance, you could use the atypical formula to forecast the EAC and the ETC:.

This is due to the fact that the variance is going to continue to affect the project. As the project progresses, it will be necessary to forecast out the total anticipated funding required. A project to renovate an office has a start date of January 1 and a completion date of February There are four tasks:.

At an earned value progress point say, January 31 , the earned value calculations might look like this:. For more information, please visit our Earned Value Tutorial. Bernie Roseke, P. As a bridge engineer and project manager, he manages projects ranging from small, local bridges to multi-million dollar projects.

He is also the technical brains behind ProjectEngineer , the online project management system for engineers. He is a licensed professional engineer, certified project manager, and six sigma black belt.

He lives in Lethbridge, Alberta, Canada, with his wife and two kids.