Accounting in real estate investment companies and its application in the real estate investment companies accounting program
What are the most important cost items that can cost us as a real estate investment company?
How can we prove it in the real estate investment companies accounting program?
What is the accounting treatment for the cost of projects in real estate investment companies? How can we apply the issue of the cost of the real estate investment companies accounting program?
When do we admit a particular clause of expenditure as a business cost, and when do we admit it as periodic expenditures?
How is the integration between the subsystems, In order to extract at the end to a report in the Real Estate Investment Companies Accounts Program? That demonstrates for us the cost of single project.
We talked in previous articles about the accounting cycle for real estate investment companies, and how we practically apply their steps to the real estate investment company accounts program.
The first article: is entitled "The Real Estate Investment Course in the Real Estate Investment Accounting Program," which deals with the most important accounts that any real estate investment company can use.
Second article: The Real Estate Investment Course and its application in the Real Estate Investment Accounting Program, which deals with the costs of projects in real estate investment companies.
Our article today deals with the cost of business that real estate investment companies mainly carry out
In particular, how can we finally implement the factory clauses and wages in the real estate investment company's accounts program?
Proving of the cost Manufactures and Wages in the Real Estate Investment Firm Accounting Program
The Manufactures are the cost of the labor that works on these projects directly, such as the craftsman who works with the contractor who works with the construction and paints .or the carpenter who does the carpentry work and so on.
Let us talk about the issue of manufactures in terms of the scenarios that may occur and often do not differ much in terms of the accounting treatment, and also learn how to apply each scenario in the accounting program of real estate investment companies.
Scenario one: Wage costs for labor and employees in the Real Estate Investment Company Accounting Program
Where there is a group of labor working directly in the company and those employments are just a group of employees working in the company
Whatever the nature of their work, whether we will pay their wages through their production or with a fixed salary, their wage costs will be a direct cost carried over to the projects according to the size of each project's use of labor during this period, which we will prove it as follow:
the account direct wages - project cost center.
To those mentioned:
Current account of the Insurance and Pensions Authority.
Current account tax authority on income "earning work"
Employees' ancestor account.
Account of the Employees' Sanctions Fund
Account salaries payable
Of course, if we were using the human resources management program, we would have written a complete article that talk about wages Entry that can be viewed in detail.
Second scenario: recruiting labor from abroad
Recruiting labors from abroad, meaning the work is in the diary system, most often, supervisors from the company are hired to follow up labors at the end of the day, week or month and they get paid for their work. This transaction is proven by this entry
From a labor and manufacturing wages / cost center account
To the payable wages account / or other credit accounts
The third scenario relies on an external company that carries out all the work
This is the most frequent scenario that happens, which is reliance on an external company that carries out all or part of the work based on the contract between us
We call it a sub-contractor, who can only be a supply contractor, such as contracting with a supplier who supplies concrete or cement, and so on...
Or a Supplier and installation contractor for example, he's supplying ceramics and installing it
There are also manufactures contractors like the ones who do the combinations and different finishing works.
What happens with the subcontractor?
I am supposed to contract with him in the beginning on the condition that he implements a specific set of clauses. And when the work begins, he presents a work abstract saying that he has implemented part or all of the agreed upon terms of the project
Of course, the engineer in charge of the project begins to fully approve this statement, and from here we establish a debt entitlement for the benefit of the subcontractor and at the same time at the cost of the project with the value of the work carried out, whether it is a supply or supply and installation, and we spoke in a previous article about the abstract and its techniques and accounting directives.
This general form of the screen for entering the abstract data in the contracting accounting
Program, Accflex, which of course integrates with the real estate investment accounts program
Real estate investment companies accounting program
This is the form of the abstract after what has been printed in the contracting accounting program Accflex:
And of course, we will not forget the accounting guidance in the Accflex accounts program, which is done automatically without the need for any intervention
Now we can reveal that we have greatly estimated 90% of the total project costs or set of projects that the company carries. Which are the costs of raw materials? Various, materials and supplies in addition to the costs of wages and various factories, internally and externally
Proof of indirect costs distributed to projects in the real estate investment accounts program
There is a group of common costs that the company bears, such as the costs of the administrative office, supervisors and others, and indirect costs are charged to projects based on the benefit of each project. Of course, the basis of distribution will vary from one type of cost to another according to the degree of benefit, and in all cases the cost is proven by this entry
From the calculation of the indirect costs charged.
To the accumulated depreciation account.
To real estate taxes account
. Thus, we have charged the projects with their costs, taking into account that the previous costs are carried over to the terminal accounts belonging to a main account in current assets called works in progress.
These accounts are linked to cost centers that are different projects, and I can review very many reports on cost centers, in order to track project costs in detail, even if we use an Arabic accounts program, Accflex. We can extract an assistant ledger for the cost center in as follow:
This report shows the extent of integration between the various programs in the real estate investment company's accounts program
By this, we explained the cost cycle in the real estate investment company's accounts program, and in the next article, we will talk about the revenue cycle and when we recognize the revenue in real estate investment companies.
Request for Quotation