Importance of Client Control Chart In Project Accounting In Construction & Infrastructure Industries

What is Project Accounting:

Project Accounting is the accurate accounting of the expenses incurred in the life span of the projects in terms of Material cost, Labour Cost and Expenditure incurred for Capital Equipment including Direct and indirect cost.

For example, project accounting during a construction project might involve tracking the cost of all building materials, labour and employee wages and permit costs.

Principles of Project Accounting:

There are eight principles of Project Accounting as follows:

1. Cost Principles

2. Matching Principles

3. Consolidation Principles

4. Full Disclosure Principles

5. Prudence Principles

6. Liability Principles

7. Control Principles

8. Resource Allocation Principles

Under the Control Principles we are preparing various control charts- Client control chart is one of the most important charts which depicts total outstanding from our client. As we all know that there is only one source of income in a project is Income from Client in construction/infrastructure industries.

Why should we prepare Client Control Chart in construction/infrastructure industries:

There are so many reasons why we should prepare the Client Control Chart in construction/infrastructure industries:

1. To know the total outstanding from our client to manage and maintain the cash flow of the company

2. Total certified and uncertified amount of RA Bills

3. Withheld Amount by the client

4. Release of withheld amount by client

5. Total Retention Amount Hold by the client

6. Mobilisation Advance deducted by the client

7. deductions if any by the client

8. Net Amount received from Client

9. GST Receivable from the client

10. GST Reconciliation matching with GSTR-9

11. TDS-GST deducted by the client

12. Total Income Tax-TDS deducted by the client

13. TDS Receivable reconciliation

14. Labour cess reconciliation

15. At last, this is the only control chart which state the accurate picture of our receivables, outstanding, deductions from the client if maintain accurately.