user guide cost & allowables

USER GUIDE

Cost & Allowables

1 | USER GUIDE - Cost & Al lowab les

Copyright © 2020 by Construction Computer Software (CCS)

This publication is protected by copyright, and permission must be

obtained from the publisher prior to any prohibited reproduction, storage

in a retrieval system, or transmission in any form or by any means,

electronic, mechanical, photocopying, recording, or likewise.

User Guide Reference: 45-CAN-TCH-UG-0001

User Guide Version: 00

User Guide Date: April 2020

Information is correct as per the functionality present in

Candy V 2.01e12.8


TABLE OF CONTENTS

INTRODUCTION ......................................................................................................... 3

REQUIREMENTS ......................................................................................................... 3

DEFINITIONS ............................................................................................................ 3

GETTING STARTED .................................................................................................... 4

Analyse Allowable To-Date ....................................................................................... 4

Import To-Date Costs .............................................................................................. 5

Cost Adjustments ................................................................................................... 8

Reallocation ......................................................................................................................... 9

Accruals .............................................................................................................................. 9

S/C Liability ......................................................................................................................... 9

Materials ........................................................................................................................... 10

Contras ............................................................................................................................. 10

Residual ............................................................................................................................ 10

Other ................................................................................................................................ 10

Notes ................................................................................................................................ 10

Release the Costs .................................................................................................. 11

Cost Rate ............................................................................................................. 13

Cost Worksheets .................................................................................................... 16

SUBCONTRACT COSTS ............................................................................................. 19

Subcontract Cost Code ........................................................................................... 19

COST AND ALLOWABLES AT COMPLETION ............................................................... 23

NEXT VALUATION SETUP ......................................................................................... 24

BACKUP OR COPY THE JOB ...................................................................................... 24

VALUATION SETUP .................................................................................................. 26


INTRODUCTION

Cost and Allowables monitors the financial performance of a project. The current Allowable generated by

Candy is compared to the current Cost as captured in an accounting system like BuildSmart®.

While it is essential to understand where a project stands financially at any point of time, it is more

important to have the ability to forecast its financial status at completion. The Cost and Allowables module

provides all the tools necessary to achieve this, thereby assisting the Project Team to maximise the

profitability of a project.

To summarise, Cost and Allowables are used to analyse:

• To-Date Allowables versus To-Date Cost.

• Remaining Allowables versus Remaining Cost.

• At Completion Allowables versus At Completion Cost.

There are a variety of documents and reports available that are customisable to the requirements of the

Project Team.

REQUIREMENTS

To extract the most benefit from Cost and Allowables, users should have a working knowledge of Candy

Estimating and Valuations as this manual refers to the Bill document, Valuations, Worksheets, Resources,

Project Codes and Subcontract Manager.

DEFINITIONS

Below is a list of definitions for the terminology used within this manual:

Allowable To-Date = Actual Quantity x Net Rate

Cost To-Date = Imported Cost To-Date

Variance To-Date = Allowable To-Date - Cost To-Date

Allowable Remaining = Remaining Quantity x Net Rate

Cost Remaining = Remaining Quantity x Cost Rate

Variance Remaining = Allowable Remaining – Cost Remaining

Allowable at Completion = Final Quantity x Net Rate

Cost at Completion = Cost To-Date + Cost Remaining

Variance at Completion = Allowable at Completion – Cost at Completion


GETTING STARTED

• Step 1: In the Cost & Allowables tab, select the icon.

• Step 2: Select New Document > 1. Cost & Allowable > 1.1 Cost and Allowables by Period.

Analyse Allowable To-Date

To ensure the correct comparison between Cost and Allowables, users should measure the Actual

Quantity on the same date as the Cost Close for accounts.

• Step 1: Select 1.1 Cost and Allowables by Period.

• Step 2: Open the document.

• Step 3: Select Calculate to summarise the latest information.


The above document shows the To-Date, Remaining and At Completion Allowables for the current

Valuation.

The Task Code column is included, by default, within this document. The BuildSmart® accounting system

contains both the Task Code (Activity Code) and Cost code (Ledger Code) for more comprehensive

financial reporting. If your accounting system does not make use of Task Codes, its column can be

removed from the document (see below).

Import To-Date Costs

The To-Date Costs can get imported from:

• A text file from an accounting software package.

• An Excel file.

• The Candy Material received module.

• BuildSmart® accounting software.


To import costs from a file, complete the following steps:

• Step 1: In Cost & Allowables > Documents > Cost & Allowables documents.

• Step 2: Select the document 3.1 Cost Import, then click Select.

• Step 3: Select Tools > Import Costs To-Date > Import from File.

• Step 4: Browse for the file to Import.


To complete the import process, follow the two (2) steps below:

• Step 5: Select from the available column headings that match headings of the imported cost file.

• Step 6: Headings on the import document can be removed by inputting the number of lines that are

to be ignored (see below).

The Code Description does not require matching as Candy already associates the Cost Code

Description with the Cost Code.


When the import is completed, the imported information must get checked against the Candy information

for differences.

To check this, follow the path and steps below:

• Step 1: Select Tools > Housekeeping > Check Import File

• Step 2: Select the codes to check.

If the imported file is incompatible with the information within Candy, a notification message will

display, it is most likely that the column headings within the imported document remain undefined as

Cost Codes in Candy. These can be deleted using a Control & Delete key combination.

• Step 3: Once the file corrects, repeat Step 1.

A message should display reading Validation successful as below.

Cost Adjustments

After every cost import, further adjustments can be made by the site personnel to reflect the ‘True’ Cost

To-Date. Those adjustments are performed using the imported costs on the same document, ‘3.1 Cost

Import’, and get made under the following headings:


Reallocation

These are costs that have been misallocated and must be corrected. The total of this column must always

equate to zero.

Accruals

These are known costs uncaptured in the Accounts Ledger.

S/C Liability

This is the difference between the Subcontract Pay Amount and the Due Amount.

To see these amounts take the following step:

• Step 1: Under Subcontract Manager tab > Subcontract Document Manager > 3.1 Subcontract

Summary or select the icon to access the Subcontract Document Manager.

10 | USER GUIDE - Cost & Al lowables

Materials

These are materials that have been pre-purchased but may not be claimable within the current Valuation,

such as materials off-site.

Contras

These are contra charges that have yet to be processed.

Residual

This refers to the pre-purchase of equipment, such as formwork, which must be written off over a period

of time.

Other

This refers to any other cost adjustment.

Notes

These explain the reasons for the cost adjustments.


Release the Costs

Once adjustments have been entered, Costs are releasable for comparison against the Allowable.

To view this, from the document 3.1 Cost Import, take the following steps:

• Step 1: Select Tools > Release Costs for Cost and Allowables.

The Actual Cost column (above) is used within the Cost and Allowables documents and labelled as

To-Date Cost (below).

The To-Date financial position of the Job as the Actual Allowable. This gets compared to the To-Date

costs of the Job and is broken down into the project Task code and Cost Code.

The To-date section displays the current position between Allowable and Cost, whereas the Remaining

section displays the forecast position from current to completion, future costs are influenced by:

• A change in resource rate.


• A change in the production outputs listed within the original worksheet.

• A change in the amount of allowable waste.

• The necessity to employ another subcontractor with rates different to Allowable rates.

A far more accurate financial forecast is achievable by using:

• Cost Rates (future resource rate adjustment).

• Cost Worksheets.

• Subcontract Manager.


Cost Rate

It is inevitable that throughout a project, the prices of resources change. To analyse the effect of these

price changes, the Cost Rate must be entered in the following way:

• Step 1: Under Estimating > Document Manager > Resources > 2.3 Resource List with Cost

Rates.


The Final Rate (Allowable Rate) is displayed and must not be altered, while the Cost Rate defaults to the

same as the Final Rate but can be adjusted as required. Changing the Cost Rate does not change the

Allowables but does change the Forecast Cost to Completion.

In the following example, the Resource Stock Bricks has been updated to reflect the current rates.


Updating the Resource Costs has a significant impact, as seen in the Remaining Variance column as

can be seen from the example below:

Before Updating Resource Cost Rates

Step 1: Select Cost & Allowables tab > Document Manager > 1. Cost & Allowable > 1.1 Cost and Allowables

by Period.

After Updating Resource Cost Rates


Cost Worksheets

Production outputs, waste allowances and other variables may require adjustment to reflect current onsite

conditions.

To make these adjustments, complete the following steps:

• Step 1: Under the Valuations tab, select the icon.

• Step 2: Select New Document > 6. Costs to complete > 6.1 Bill with cost rates for cost w/s

adjustment.


• Step 3: Select the Price Code Worksheet requiring adjustment, then select View > Flip to Cost

Worksheet.

In this exercise, the production output of Excavate to stockpile is increased from 150m3/day to

175m3/day, and the production output of Backfill & Compact is increased 250m3/day to 300m3/day.

Original Cost worksheet – identical to Net worksheet:


Updated Cost worksheet:

Take note how the worksheet title is now ‘Cost Worksheet’ after changing the production output, the Cost

Rate now differs from the original Cost rate.


SUBCONTRACT COSTS

Forecasting the Cost to Completion for subcontract work is simplified when using the Subcontract

Manager.

Cost and Allowables reports against the Subcontract Accounts (Ledger) Code without any change to Cost

or Allowable worksheets, regardless of whether there are multiple subcontractors allocated to one or

more BOQ items. This is possible by identifying the Subcontract Cost Code and the Net Worksheet Cost

Code.

Subcontract Cost Code

The Subcontract Cost Code is the code to which payments for a specific subcontract get allocated. This

code is typically the Ledger Code used by the accounts department to identify the cost against the

subcontractor.

To define Cost Codes, take the following steps:

• Step 1: Under the Cost & Allowables tab > Main > Definitions and Settings.

• Step 2: Select 4.1 Cost Codes (Ledger Code).


The example below shows two subcontractors are executing the same Bill items; namely, Earnie’s

Earthworks, Cost Code 901, and AF Lovall, Cost Code 902.

Once the Cost Codes are defined, complete the following steps;

• Step 1: Under the Subcontract Manager tab > Main > Subcontract Manager. Alternatively, you

may select the icon on the toolbar.

• Step 3: Select the Details tab for Earnie’s Eartworks.

• Step 4: Select the Subcontract Cost Code from the dropdown list, this is the Cost Code that Cost

and Allowables gets reported against; in this example, the Subcontract Cost Code is 901.


• Step 5: Navigate to BLAST1 Blasting.

• Step 6: Select the Details tab for AF Lovall.

• Step 7: Select the Subcontract Cost Code from the dropdown box, the Subcontract Cost Code is

902.

The Net worksheet Cost code is the Cost Code of the subcontract resource in the worksheet of the

current Subcontract Bill.

The example below shows that column 17.3 Resource Cost Code List is added to document

1.1 Subcontract Bill, indicating that the Net Worksheet Cost Code for the items in the Subcontract Bill

is 900.


Follow the procedure to display the Subcontract Costs to Completion for the above Subcontracts, take

the following steps:

• Step 1: Under the Cost and Allowables tab > Document Manager > select 1.1 Cost & Allowable

by Period.

• Step 2: Select Tools > Costs and Allowables Settings.

• Step 3: Select the option Costs for Subcontract Items from Subcontract Manager, under the

heading Advanced Calculation Options, then select OK.


This process dictates specific rules to be followed; these include:

• The Subcontract Due Quantity total must equate to the Actual Quantities listed within the leading

contract Valuation; if there is a difference, a message displays, instructing users to make the

necessary corrections.

• No Subcontract Due Quantity may exceed the Final Awarded Quantity.

• The total of Final Awarded Quantities must equate to Final Bill Quantities - to ensure this, navigate to

‘Subcontract Manager’, select ‘Document Manager’, then ‘Document 2.1 BOQ with Subcontract

Allocation’.

• If the above rules get disobeyed, a message displays instructing users to make the necessary

corrections.

• Where the main contractor and subcontractors undertake work using the same Bill items, internal

variants get created.

COST AND ALLOWABLES AT COMPLETION

The methods described above enable accurate calculation for the Forecast Cost to Completion.

The Allowable at Completion is calculated using the multiplication of Final Quantities and Net Rate, and

the Cost at Completion is the sum of Cost To-Date and Remaining Costs, these determine the financial

performance of the project at completion:

• Open and calculate the document 1.1 Cost and Allowables by Period.

• Remove the Task code to display the document below.

The changes made to Resource Costs, Cost Worksheets and Subcontract Manager reflect in the above

document with the resultant variances to Allowables shown in Remaining Variance and At Completion

Variance.


NEXT VALUATION SETUP

Completing the Cost and Allowables documents is the final stage in the Valuation cycle; therefore, it is

time to configure the next Valuation.

Setting up new Valuations copies all ‘To-Date’ Quantities and Costs into such from the previous

Valuation.

BACKUP OR COPY THE JOB

It is important to backup and copy of each Valuation Job before entering new Valuation’s quantities. To

backup or copy any job, take the following steps:

• Step 1: In the Job Manager, right-click on the Job you wish to backup or copy.

• Step 2: Select Duplicate Job.

• Step 3: Right-click on the duplicated job, then select Rename the Job.


VALUATION SETUP

To set up the next Valuation, take the following steps:

• Step 1: In the Job Manager, select the renamed job.

• Step 2: Under the Valuations tab > Main > Valuation Setup Manager.

• Step 3: Select Tools > Setup next Valuation.

• Step 4: Select Yes to confirm the Valuation backup.


Once the next Valuation is confirmed, the current Valuation gets archived, the details of the new Valuation

will display to the user. Select OK.