General Inquiries

GC/CM - When to Use a Project Accountant?

  • 1.  GC/CM - When to Use a Project Accountant?

    Posted 10 days ago
    We are a GC/CM with projects ranging from $5 million to $100 million.  Our current project financial management structure is that the Project Manager and Project Administrator coordinate project financial management duties such as processing change orders, approving vendor and sub pay apps,
    submitting the owner billing, and project forecasts.  Accounting is run out of the home office and handles actual processing and paying of all invoices, collecting payments, etc.

    I am looking at implementing a "project accountant" position to help our project managers and admins with the financial management of their projects. I am curious as to what other companies are doing with regard to when to put a PA on a project.

    Do you use PA's only on projects over a certain threshold dollar amount of job?

    Do you use a PA on every project but have a PA support multiple smaller dollar projects?

    Do your PA's work at the project site or in the home office?

    Thank you,
    Jim

    ------------------------------
    James Burnett
    Chief Financial Officer
    W.M. Jordan Co., Inc.
    Newport News VA
    (757) 596-6341
    ------------------------------


  • 2.  RE: GC/CM - When to Use a Project Accountant?

    Posted 8 days ago
    @James Burnett   I've been a Project Accountant at 3 GC's. All three GC's used a Project Accountant on every project. I would handle anywhere from 5 to 15 projects, in the range of $1 million up to $66 million, at a time. Our PA's would work in the home office the majority of the time. However, some larger projects would require an onsite PA. We would then send a PA to the jobs site. This PA would still be responsible for their other projects as well.

    Let me know if you have any other questions.

    ------------------------------
    Michael Tucker
    Assistant Controller
    Accurate Firestop & Insulation
    Pleasanton CA
    (510) 886-1169
    ------------------------------



  • 3.  RE: GC/CM - When to Use a Project Accountant?

    Posted 7 days ago
    Michael we are in the process of switching over to a Project Accounting system.  I have my understanding of project accounting and my boss has his.  I was hoping you could provide a little more in site as to what you do as a project accountant?

    ------------------------------
    Amy Rines
    Vice President of Finance
    Colarelli Construction Inc
    Colorado Springs CO
    (719) 475-7997
    ------------------------------



  • 4.  RE: GC/CM - When to Use a Project Accountant?

    Posted 7 days ago
    I'm no longer a Project Accountant but when I was I did the following:

    Accounts Receivable
    -Create monthly billings for owners and general contractors.
    -Submit releases, insurance and bond which are required for payment.
    -Follow-up with owner and general contractor on payment status.

    Insurance/ Bonds
    -Request insurance from 40+ subcontractors/tiered subcontractors per job.
    -Enroll subcontractors/tiered subcontractors in our CCIP insurance program.
    -Review submitted insurance to insure all requirements have been met.
    -Contact insurance agents for revision and renewals.
    -Insure all required documents are submitted prior to subcontractors being on-site.
    -Review bonds using AM Best to insure they meet financial requirements.

    Subcontract Accountant
    -Work with Project Manager to approve monthly schedule of values (SOV's).
    -Process 40+ monthly subcontractor payment requests per project.
    -Enter payment request using Invoice Router and Timberline Accounting.
    -Insure that subcontractors have submitted required documents prior to releasing payment.
    -Enter contract and change orders in to Timberline.
    -Run monthly Timberline reports to insure costs are recorded correctly.
    -Help the project team create monthly profit projections.
    -Re-class costs and preform budget revisions when necessary.

    Certified Payroll
    -Review One Time Forms to ensure they have been completed correctly.
    -Review weekly to insure employees are paid the correct hours, rate, classification, etc.
    -Review CAC and monthly union dues payments, apprentice/ journeyman ratio.
    -Work with payroll monitoring agency's to insure subcontractors are in compliance with all laws.
    -Use the DIR website to check the rate for different classifications and rate increases

     



    ------------------------------
    Michael Tucker
    Assistant Controller
    Accurate Firestop & Insulation
    Pleasanton CA
    (510) 886-1169
    ------------------------------



  • 5.  RE: GC/CM - When to Use a Project Accountant?

    Posted 7 days ago
    We are a GC and have several project accountants on our team, handling about 5-7 projects each (dependent on size and timing of the project).  Our project accountants have the following responsibilities:
    • Input all invoices/payment applications into our system, which should always go the accountant first so no expense is not recorded timely.  These are then routed to our project managers for approval.
    • Pay all approved invoices/payment applications as needed.
    • Input commitments/modifications that adjust a subcontractor contract/vendor purchase order accordingly.  They are also in contact with the project management team if pay apps/invoices exceed  subcontract/purchase order and make sure it is modified before additional payments are made.
    • At the end of the job, the Project Accountant would make sure that all commitments have been reconciled with the payments made.  Either making sure it has been billed in full or a deduct modification needs to be made.
    We have rarely, if at all, sent a project accountant to a job to perform these functions.  I hope this helps as a starting point but I'll be glad to answer any questions.

    ------------------------------
    Rosemarie Palmer
    Controller
    Dana B. Kenyon Co
    Jacksonville FL
    (904) 394-8245
    ------------------------------



  • 6.  RE: GC/CM - When to Use a Project Accountant?

    Posted 7 days ago
    We are a GC that has both PCs and PAs; both positions play a role in the administration of project financials. Here's how we have the roles broken out:

    PCs (3-5 jobs each/work out of the office)
       - Post subcontracts and subcontract change orders (these are initiated by PMs in CMiC)
       - Coordinate creation and execution of all sub contract docs
       - Input invoices
       - Input sub pay apps - PCs are the main administrative point of contact for subs
       - Coordinate/track collection of closeout docs
    PAs (7-10 jobs each - no dollar threshold/work out of the office)
       - Final review and posting of all invoices and pay apps
       - Compilation of owner bills
       - Assist PMs with job costing issues and budget transfers
       - Lien waiver tracking

    We've gone back and forth a lot over the past five years on how much of the financials role should sit with the PCs verse PAs.  I'd ultimately like more of the dollar associated workflow to flow through PAs, but its made sense to stay with the PCs since they are regularly working with subs on the contract side.

    Thanks,

    Dave

    ------------------------------
    David Maddocks CPA
    Controller
    Brinkman Partners
    Fort Collins CO
    (970) 672-1024
    ------------------------------



  • 7.  RE: GC/CM - When to Use a Project Accountant?

    Posted 7 days ago
    If for any other reason, a project accountant will ensure that pay apps are accurate, timely, and consistent.  Three causes for poor project-level cash flow.  And project level cash flow is the number one reason for profit erosion, considering cost to finance projects or opportunity costs.

    Project accountants tend to understand opportunity costs, while operations (CM's) aren't typically trained to consider that.  They are process driven and focused on project completion and relationships (two very important variables).  But they aren't overly concerned with maintaining positive cash flow.  I've also observed many pay apps that go out just covering costs, without regard to overhead and profit. CM's need to view mark-up, or fee, in the same regard as other direct costs.  They should equate fee with an obligation on their part.  This becomes particularly costly when considering a retainer in the contract.

    I would love to share my cash flow training with you, if you're interested.

    ------------------------------
    John Killingsworth Ph.D.
    Assistant Professor
    Colorado State University
    Fort Collins CO
    (715) 308-1167
    ------------------------------



  • 8.  RE: GC/CM - When to Use a Project Accountant?

    Posted 6 days ago
    John - I would love to see your cash flow training if you wouldn't mind sharing, thank you.

    ------------------------------
    Lynn Caouette CPA, MSAT
    United Steel, Inc.
    East Hartford CT
    (860) 610-4040
    ------------------------------



  • 9.  RE: GC/CM - When to Use a Project Accountant?

    Posted 5 days ago
    ​John,

    I would be very interested in your cash flow training as well

    Thanks,

    ------------------------------
    James Fowler
    President
    James W. Fowler Co.
    Dallas OR
    (503) 623-5373
    ------------------------------



  • 10.  RE: GC/CM - When to Use a Project Accountant?

    Posted 5 days ago

    Same here.  Thank you

     

    Carmen Agra-Boitnott, CPA

    Controller

    P | 540-283-3090  C | 540-682-3990            

     

    BRANCH GROUP

    BRANCH CIVIL  |  BRANCH BUILDS  |  G.J. HOPKINS  L.A. LACY

    VIRGINIA  |  NORTH CAROLINA

    branchgroup.com  |  facebook  |  linkedin

     






  • 11.  RE: GC/CM - When to Use a Project Accountant?

    Posted 5 days ago
    Good stuff John!

    ------------------------------
    Steve Brunner CPA, CVA, MAFF
    CFO
    Rizzo Brothers Painting Contractors
    Covington KY
    (859) 431-4700
    ------------------------------



  • 12.  RE: GC/CM - When to Use a Project Accountant?

    Posted 6 days ago
    Good Morning!

    I would be interested in your cash flow training, John!

    Also, I would be interested in feedback from other subcontractor companies as to the duties assigned to the Project Coordinator versus Project Accountant.

    Thank you!

    ------------------------------
    Paula Berg MBA
    Assistant Controller
    Feyen Zylstra, LLC
    Grand Rapids MI
    (616) 224-7173
    ------------------------------



  • 13.  RE: GC/CM - When to Use a Project Accountant?

    Posted 6 days ago
    AGC of America and GH Phipps Construction Companies sponsored a series of case studies on Cash Flow Analysis with me.  From those case studies I developed a basic model that any company can adapt for their use to manage project level cash flows.  The training I provide is a 4-hour session, taking the CM's step-by-step through projecting and managing cash flows.  We calculate and discuss the implications of negative cash flows, e.g. cost to finance on a line of credit, versus use of company cash (opportunity cost at ROA).  The model is created to allow CM's to quickly enter in their monthly cash flows into M.S. Excel and effectively understand the status of their job.  We also discuss strategies and run through scenarios to improve project level cash flows.  The training also includes instruction on how to calculate the cost associated with trade credit discounts and how to use that as a negotiating tactic to accelerate early payments.

    I love opportunities to come and teach and share my research, so please let me know if I can be of service.  You can email me if you're interested in more details: j.killingsworth@colostate.edu

    ------------------------------
    John Killingsworth Ph.D.
    Assistant Professor
    Colorado State University
    Fort Collins CO
    (715) 308-1167
    ------------------------------



  • 14.  RE: GC/CM - When to Use a Project Accountant?

    Posted 5 days ago
    John - I would also like to see your cash flow training if you are willing to share it. My email is wickz@otl-inc.com.

    Thanks!

    Wick

    ------------------------------
    J. Wickham Zimmerman
    CEO
    OTL
    Anaheim CA
    (714) 637-4747
    wickz@otl-inc.com
    www.otl-inc.com
    ------------------------------



  • 15.  RE: GC/CM - When to Use a Project Accountant?

    Posted 2 days ago
    Hi John,
    I would love to see your cash flow training model.

    Thank you.​

    ------------------------------
    Keri Adrian-Williams
    Corporate Controller
    Landmark Structures, LP
    Forth Worth TX
    (817) 439-8888
    ------------------------------



  • 16.  RE: GC/CM - When to Use a Project Accountant?

    Posted 5 days ago

    Hello,

     

    I would be interested in the cash flow training, as well.

     

    Sue Jones

    Controller

    F.M. Harvey Construction Co., Inc.

    128 Cockeysville Road I Hunt Valley, MD  21030

    O: (410) 584-9030 I C: (443) 824-7190 I

    www.fmharvey.com

    logosmall                 

     






  • 17.  RE: GC/CM - When to Use a Project Accountant?

    Posted 5 days ago
    Wow, what an amazing response.  I guess we are all seeing the same need for training PMs in cash flow management.

    I feel bad for hijacking James' post on project accountants.  I do think they are critical to the success of a company.  Perhaps a good research project should look at the cash flow trends for companies that use project accountants versus those that do not.  I'm betting there is a correlation to timely invoicing and receivables.

    I think I need to create a new post with some of my cash flow training.  Just as a preview of what I can offer as help to strengthen the knowledge, skills, and abilities of our PMs regarding project accounting.

    Perhaps that's an opportunity to share results of my research on "economic downturn planning" with local CFMA chapters.

    Thanks everyone for the overwhelming interest.

    ------------------------------
    John Killingsworth Ph.D.
    Assistant Professor
    Colorado State University
    Fort Collins CO
    (715) 308-1167
    ------------------------------



  • 18.  RE: GC/CM - When to Use a Project Accountant?

    Posted 5 days ago
    John,

    I would love to see your cash flow training as well.  Thank you.

    ------------------------------
    James Boyd
    Chief Financial Officer
    Dallas 1 Construction and Development
    Thonotosassa FL
    (813) 865-4102
    ------------------------------



  • 19.  RE: GC/CM - When to Use a Project Accountant?

    Posted 5 days ago
    John,
    I would also appreciate seeing your cash flow training.
    Thank you!!​

    ------------------------------
    Randi Berger
    Secretary/Treasurer
    Bergstrom Electric Inc
    Grand Forks ND
    (701) 757-5314
    ------------------------------



  • 20.  RE: GC/CM - When to Use a Project Accountant?

    Posted 4 days ago
    Hi John;

    If possible I would like to see your cash flow training as well.

    Thank You.

    ------------------------------
    John O'Brien CCIFP, CPA
    Controller
    Herlihy Mid-Continent Company
    Romeoville IL
    (630) 378-1000
    ------------------------------



  • 21.  RE: GC/CM - When to Use a Project Accountant?

    Posted 4 days ago
    My e-mail address is johno@hmcco.net

    ------------------------------
    John O'Brien CCIFP, CPA
    Controller
    Herlihy Mid-Continent Company
    Romeoville IL
    (630) 378-1000
    ------------------------------



  • 22.  RE: GC/CM - When to Use a Project Accountant?

    Posted 4 days ago
    I would also be interested in your cash flow training.

    Julie Irvin
    Chief Financial Officer
    A-C Electric Company
    julie.irvin@a-celectric.com
    661/410-0000

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  • 23.  RE: GC/CM - When to Use a Project Accountant?

    Posted 4 days ago

    John,

    I would be interested in your cash flow training as well.

    Thank you,



    ------------------------------
    Stephanie Pompeo
    Director of Finance/Technology
    Wharton Smith Inc.
    ------------------------------



  • 24.  RE: GC/CM - When to Use a Project Accountant?

    Posted 4 days ago
    Good Morning John,

    I would be interested in receiving your cash flow training as well.

    Thanks in advance.

    Danna

    ------------------------------
    Danna Young CPA
    Controller
    Dohn Construction, Inc.
    Fort Collins CO
    (970) 490-1855
    ------------------------------



  • 25.  RE: GC/CM - When to Use a Project Accountant?

    Posted 5 days ago
    I am very interested in seeing your cash flow training, John!
    Thank you,
    Emily

    ------------------------------
    Emily Dolson
    CFO
    ATCS, Inc.
    Englewood, OH
    edolson@atcs-inc.com
    ------------------------------



  • 26.  RE: GC/CM - When to Use a Project Accountant?

    Posted 4 days ago
    Sounds like a class at the annual conference :)!!

    ------------------------------
    Steve Brunner CPA, CVA, MAFF
    CFO
    Rizzo Brothers Painting Contractors
    Covington KY
    (859) 431-4700
    ------------------------------



  • 27.  RE: GC/CM - When to Use a Project Accountant?

    Posted 4 days ago
    Hi John,

    I am interested in your cash flow training. Thank you.

    ------------------------------
    Jacqueline Serdahl
    Controller
    Boone Electric
    Puyallup WA
    (253) 243-0321
    ------------------------------



  • 28.  RE: GC/CM - When to Use a Project Accountant?

    Posted 4 days ago
    I would be interested in the training as well.

    Thank you,


    ------------------------------
    Marjorie Roth Perez
    Senior Accountant
    Ed Wallace Construction, Inc.
    Stanley NC
    (704) 827-2676
    ------------------------------



  • 29.  RE: GC/CM - When to Use a Project Accountant?

    Posted 4 days ago
    Cash flow training sounds great.  But does anyone else have any thoughts about the use of project accountants????

    ------------------------------
    James Burnett
    Chief Financial Officer
    W.M. Jordan Co., Inc.
    Newport News VA
    (757) 596-6341
    ------------------------------