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Retrieve Cost Data - STANDARD


How to do Cost Data Retrievals in D-E Project Accounting

This article explains how to retrieve project cost data from the relational database of TECA.

            Under the term "Data Retrieval", we shall understand the ability of the Cost Engineer to find instantly the current cost status of every major Project Object (CONSTRUCTION, MATERIALS, ENGINEERING) as well as of every Project Participant (CONTRACTORS, SUPPLIERS, ENGINEERING FIRMS).         

            Cost planning and control of any complex engineering project - having construction period of three or more years, comprising more than one sub-project, with hundreds of firms involved, and several hundreds of Cost Accounts active - can be managed efficiently, but only with help of the dual-entry accounting that is supported by a computer software utilizing relational database. Why 'relational' database? Because only such type of database allows for instant and easy data retrieval.         

            As already explained in our previous articles, project cost planning and control requires implementation of the dual-entry accounting, that is similar but not the same as that used by Business.  Project Cost Engineering is concerned with BUDGET and TiME-COST, and not with PROFIT or LOSS that are the main concerns of Business.  Although many accounting features are similar - such as the format of journals and ledgers, yet the basic equations governing the accounting concept of Business Finance and that of Engineering Cost Control are both completely different; click here. Moreover, D-E Cost Engineering implements COST-NETWORK (click here) that has no counterpart in Business Accounting.

            So far, the only project accounting software utilizing the dual-entry methodology - and also interacted with computerized relational database - is the computer program TECA, described in our e-mail articles and available via Internet; (click here). In the future, most probably, there will be available more similar project accounting computer programs, but not now. 

            Data retrieval from the relational database is facilitated by the SQL-language that permits to retrieve information instantly, based on any set of user-defined parameters. In the TECA computer program, the data retrieval concept is built already into the software, making the user unaware about any need to create statements in the SQL-Language.  There are two types of data retrieval in TECA:

  • AUTOMATIC RETRIEVAL
  • USER-DEFINED RETRIEVAL

         The Automatic Retrieval deals with project cost data related to Project Objects (Cost Accounts: CONSTRUCTION, MATERIALS, ENGINEERING) and to Project Participants (Expense Accounts: CONTRACTORS, SUPPLIERS, ENGINEERING FIRMS). In this article, we shall deal only with the AUTOMATIC RETRIEVAL, and in the next article we shall review the USER-DEFINED RETRIEVAL.


AUTOMATIC RETRIEVAL

The computer program TECA allows to retrieve instantly all posted cost data. As you know, in D-E Project Accounting all posted cost data are accumulated in the database ledgers through posting done in the four journals: FORECASTS, EXPENSES, BOOKINGS and COMMITMENTS. The examples below show how to retrieve data related to the four (4) typical cases:

  • Data retrieval for any PROJECT OBJECT:
    1. CONSTRUCTION object
    2. MATERIAL object
    3. ENGINEERING object
  • Data retrieval for any PROJECT PARTICIPANT:
    1. Contractor, or Supplier, or Engineering Firm

1. DATA RETRIEVAL FOR CONSTRUCTION OBJECT

This example shows how to get the current cost position related to one CONSTRUCTION Account, C004.C - Fabrication, Accommodation Platform. There are six (6) screens that illustrate each step of this procedure described below. You may scroll down the first screen to review all related screens.

PROCEDURE:

  • Start on the ledger summary screen of Cost Accounts (click here - Screen #1), and click on the button SHOW adjacent to the Account C004.C. In response, TECA displays the financial detail screen of this account (click here - Screen #2).

  • As you can see, the forecasted cost for the fabrication of this platform is SR 58,617,600, but so far the assessed progress value is SR 37,816,340. The positive balance of SR 20,801,260 and the percentage figure of 64.5% represent the current progress-cost figures.

  • Click the button GLOBAL WBS, and in response TECA displays the gWBS Account detail screen of this platform; (click here - Screen #3). As you can see, the current progress is 64.52%, whereas the progress for the last Project Period is 11.88%.

  • Click the button A, and in response TECA display the TIME-COST screen of this platform; (click here - Screen #4). As you can see, the current progress is only 64.52%, whereas the forecasted progress for this Project Period #14 should have been 81.74%. This indicates that the fabrication of this platform remains far behind the schedule.

  • Click the buttons GRAPHS, and in response TECA displays the histogram screen (click here - Screen #5), and scroll down to display the related S-Curve (click here - Screen #6). Both screens prove graphically that the fabrication of this platform is greatly delayed.

  • DONE!

        You are aware that the work progress in the case of CONSTRUCTION is assessed always by EARNED VALUE or by EARNED WORK, according to the field reports supplied by the Field Engineer.


2. DATA RETRIEVAL FOR MATERIAL OBJECT

This example shows how to get the current cost position related to one MATERIAL Account, M005.C - Structural Steel for Platforms. There are six (6) screens that illustrate the procedure steps described below. You may scroll down the first screen to review all related screens.

PROCEDURE:

  • Start on the ledger summary screen of Cost Accounts (click here - Screen #1), and click on the button SHOW adjacent to the Account M005.C. In response, TECA displays the financial detail screen of this account (click here - Screen #2).

  • As you can see, the forecasted cost for the structural steel needed for all platforms of this project is SR 34,318,300, but so far the assessed value of the progress is SR 29,272,113. The positive balance of SR 50,46,187 and the percentage figure of 85.3% represent the current progress-cost figures.

  • Click the button GLOBAL WBS, and in response TECA displays the gWBS Account screen of this structural steel material requirements; (click here- Screen #3). As you can see, the current progress is 85.31%, whereas the progress for the last Project Period is 9.21%.

  • Click the button A, and in response TECA display the TIME-COST screen of this platform; (click here- Screen #4). As you can see, the current progress is only 85.30%, whereas the forecasted progress for this Project Period #14 should have been 100.00%, already two periods before. This indicates that the materials were ordered with a substantial delay.

  • Click the buttons GRAPHS, and in response TECA displays the histogram screen (click here - Screen #5), and scroll down to display the related S-Curve (click here - Screen #6). Both screens prove that purchase orders were issued much later than originally scheduled.

  • DONE!

        You are aware that the work progress in the case of MATERIALS is assessed by EARNED WORK, based on the value of issued Purchase Orders, as reported by the Procurement Engineer.


3.  DATA RETRIEVAL FOR ENGINEERING OBJECT

This example shows how to get the current cost position related to one ENGINEERING Account, E001.C - Main Office Engineering. There are six (6) screens that illustrate the procedure steps described below. You may scroll down the first screen to review all related screens.

PROCEDURE:

  • Start on the ledger summary screen of Cost Accounts (click here - Screen #1), and click on the button SHOW adjacent to the Account E001.C. In response, TECA displays the financial detail screen of this account (click here - Screen #2).

  • As you can see, the forecasted cost for the engineering of this project is SR 19,170,000, but so far the assessed value of the progress is SR 10,776,251. The positive balance of SR 8,393,749 and the percentage figure of 56.2% represent the current progress-cost figures.

  • Click the button GLOBAL WBS, and in response TECA displays the gWBS Account screen of this cost account; (click here - Screen #3). As you can see, the current progress is 56.21%, whereas the progress for the last Project Period is 4.32%.

  • Click the button A, and in response TECA display the TIME-COST screen of this cost account; (click here - Screen #4). As you can see, the current progress is already 56.21%, whereas the forecasted progress for this Project Period #14 should have been only 42.10%. This indicates that the engineering design in the Main Office proceeded well ahead of the schedule.

  • Click the buttons GRAPHS, and in response TECA displays the histogram screen (click here - Screen #5), and scroll down to display the related S-Curve (click here - Screen #6). As you can see, the work progress was accelerated during the first eight Project Periods, and then kept at low a level during the next six Project Periods.

  • DONE!

        You are aware that the work progress in the case of ENGINEERING is assessed by EARNED VALUE or by EARNED WORK, based on the progress reports supplied by the Project Engineer.


4.  DATA RETRIEVAL FOR  PROJECT PARTICIPANTS (Contractors, or Suppliers, or Engineering Firms)

This example shows how to get the current cost position related to one CONTRACTOR, Account KIKONE.E - Kikonen Shipyard, Kotka, Finland. There are seven (7) screens that illustrate the procedure steps described below. You may scroll down the first screen to review all related screens.

PROCEDURE:

  • Start on the ledger summary screen of Expense Accounts (click here - Screen #1), and click on the button SHOW adjacent to the Account KIKONE.E.  In response, TECA displays the financial detail screen of this account (click here - Screen #2).

  • As you can see, the sum in the column named PAID shows the amount of SR 31,147,237, and the column named EARNED shows the sum of SR 37,508,007, with the positive balance of SR 6,360,770.

  • Place the cursor in the column PAID, and then click the icon Z/A (located in the upper menu bar). In response, TECA displays all invoices paid in the decreasing amount order; (click here - Screen #3).

     There the amounts shown in the PAID column represent the invoices submitted by the Project Participant and considered as paid, and they are exact figures. On the other hand,  the amounts shown in the EARNED column represent figures obtained from Field Progress Reports, and these figures are never exact. This happens because the Earned Value (or Earned Work) used to assess the cost progress usually contains a judgment error. Nevertheless, as long as the balance is positive, the Cost Engineer can assume that the final cost of the services or materials supplied by the Project Participant will remain more less within the planned forecast.

        Now, let us find all firms whose current balance is negative, what indicates that their services or materials may become more expensive then these originally estimated.

  • Start again on the ledger screen of Cost Account (click here - Screen #4), and click on the radio button named OVERPAID.

  • In response TECA displays account balances of suspected firms only; (click here - Screen #5).

        As you can see, there are nine (9) firms, and the cost excess is defined by the percentage figures in the last column The worst case is that of the firm SSC Structural Steel Contractors, Perth, Australia, where the percentage figure is as  high as 577.7%.This case must be immediately verified and corrected. Perhaps there was an error made in the Procurement Progress Report, where the cost progress should have been much higher, or it is also possible that the Project Accountant overpaid the firm.

        Another interesting case is that of the firm Globber Engineering Provisions, New York, USA, with the percentage figure of 137.7%, indicating that the cost of engineering is already high, and must be be expected to become even much higher than estimated. All percentage figures above 105% indicate that supplied services and materials provided by these firm will be more expensive than originally estimated.

        Now, let us find all firms whose current balance is positive, what indicates that either their services or materials may become less expensive then these originally estimated, or that there are more invoices still pending.

  • Start again on the ledger summary screen of Expense Accounts, and click on the radio button named TO BE PAID.

  • In response TECA displays accounts balances of such firms only; (click here - Screen #6).

  • DONE!

        As you can see, there are twelve (12) firms, and the cost deficiency is defined by the percentage figures in the last column. The interesting case is that of the firm P&ICO Paint & Insulation Company of India, who so far did not submit any invoice, although some progress was reported. By clicking on the SHOW button, adjacent to the account PAICOP.E, TECA display the financial detail screen; (click here - Screen #7). Here, the cost progress figures are well evident. There may be some reason why no invoices appear so far, and this case must be verified by the Cost Engineer with both the Project Manager and the Project Accountant.


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