Accounting & Business Planning Flashcards
Mandatories
1. How do you help your company record their profitability on a job?
a. Accurate timesheet inputs
- What is a cash flow forecast?
a. Forecast of money coming in and out of a business, in construction, the money going to the contractor at valuation intervals
- What are the other two financial statements that a company has to produce on a yearly basis?
a. Balance sheet, profit and loss statement
- What is a balance sheet?
a. Financial statement that reports company’s assets, liabilities and equity, a snapshot of a company’s assets and financial status
- What Is a profit and loss sheet?
a. Revenue, costs, expenses during the FY
- How do you compile a cashflow
a. S curve generator
b. Or accurate analysis of construction activities, using programme and key milestones/critical path and costs associated with these packages of work
- Why do we produce a cashflow?
a. Forecast spend so client and contractor can manage accounts, and ensure money is in the bank.
- What accounts and documents do firms have to send to HMRC?
a. Tax return includes balance sheet, profit and loss account, auditors report
- What is a locum?
a. A professional who temporarily fulfils the position of another. A locum agreement is where an individual is able to be a signatory on a client account when they don’t work for the firm.
- What is IFRS?
a. International Financial Reporting Standards (accounting rules and standards)
- What’s the difference between profit and revenue?
a. Profit is after expenses and OH&P, whereas revenue is the total income of a company over a set amount of time.
- So profit is obviously important to a company, but why would a company want to show a high turnover?
a. For winning business and seeming like they are doing well, can help in work winning, and getting funding/insurances to prove overall growth.
- What are signs of insolvency?
a. Over valued applications for payment
b. Requesting to not use bonds or insurances.
c. Slow progress of works
d. Silly amount of variation claims
- What can be done to plan/mitigate risk of insolvency pre and post contract?
a. Pre contract, do financial checks and front loading of costs in cashflow, informal checks too.
b. Post contract, value works properly and carefully, checking materials on site.
- What would you advise your client if a contractor went insolvent during construction?
a. Don’t pay the valuation, and if recently issued a cert, then issue a pay less notice. Terminate the contract. Start securing site and materials, contact subcontractors and suppliers about continuing works. Novate the contract to a new contractor or form new contract, depending on stage of contract.
