Here are some key points to consider for labour mobilisation:- Identify areas where required type/skill of labour is readily available to minimize mobilization time and cost. - Estimate initial cost of mobilization including transportation, advance payment, tools/equipment, accommodation etc. - Arrange for labour contracts and ensure all statutory compliances like registration, insurance, wages as per local laws.- Set up basic facilities like drinking water, temporary shelters, toilets before labour arrival to avoid delays. - Mobilize in phases linked to project schedule to avoid underutilization of labour.- Train labour on safety, quality norms and work processes to start productive work promptly.- Maintain
The document provides details of an internal controls training seminar at a construction site, including the agenda, topics to be covered, and presentations. The seminar will cover an overview of internal controls and the project manager's role, statutory compliance requirements, controls for equipment and procurement, HR and stores controls, MIS preparation, and the site accounts role. Presentation topics include tendering, budgeting, mobilization, material reconciliation, and project completion. The seminar aims to explain the importance of internal controls at construction sites and various control points that must be established.
Similar to Here are some key points to consider for labour mobilisation:- Identify areas where required type/skill of labour is readily available to minimize mobilization time and cost. - Estimate initial cost of mobilization including transportation, advance payment, tools/equipment, accommodation etc. - Arrange for labour contracts and ensure all statutory compliances like registration, insurance, wages as per local laws.- Set up basic facilities like drinking water, temporary shelters, toilets before labour arrival to avoid delays. - Mobilize in phases linked to project schedule to avoid underutilization of labour.- Train labour on safety, quality norms and work processes to start productive work promptly.- Maintain
Similar to Here are some key points to consider for labour mobilisation:- Identify areas where required type/skill of labour is readily available to minimize mobilization time and cost. - Estimate initial cost of mobilization including transportation, advance payment, tools/equipment, accommodation etc. - Arrange for labour contracts and ensure all statutory compliances like registration, insurance, wages as per local laws.- Set up basic facilities like drinking water, temporary shelters, toilets before labour arrival to avoid delays. - Mobilize in phases linked to project schedule to avoid underutilization of labour.- Train labour on safety, quality norms and work processes to start productive work promptly.- Maintain (20)
BPPG response - Options for Defined Benefit schemes - 19Apr24.pdf
Here are some key points to consider for labour mobilisation:- Identify areas where required type/skill of labour is readily available to minimize mobilization time and cost. - Estimate initial cost of mobilization including transportation, advance payment, tools/equipment, accommodation etc. - Arrange for labour contracts and ensure all statutory compliances like registration, insurance, wages as per local laws.- Set up basic facilities like drinking water, temporary shelters, toilets before labour arrival to avoid delays. - Mobilize in phases linked to project schedule to avoid underutilization of labour.- Train labour on safety, quality norms and work processes to start productive work promptly.- Maintain
1. Internal Controls at the Construction Site
7th Jan, 2012, Hotel Inder Residency, Ellisbridge, Ahmedabad
From To Topic
10.00 am 10.25 am Registration and Breakfast
10.25 am 10.30 am MOC
Overview and Relevance of Internal Controls at the
Construction Site and Role of a Project Manager
Statutory Compliances required at the
10.30 am 12.00 am Construction Site under Labour Laws / VAT Laws / Other local
requirements
Control Points for Various Equipments like Transit Miller /
Batching Plant / Concrete Pump / Crane / Excavator
Understanding of Material & Labour Procurement Related
12.15 pm 1.30 pm Controls required at the Construction Site
01.30 pm 02.00 am Lunch
HR Related Controls - Labour Colony / Mess / Attendance /
Vehicle Management
Stores Related Controls - Material Issue / Receipt /
02.00 pm 03.30 pm Reconciliation Methods / Physical Verification Plan
03.30 pm 03.45 pm Tea Break
Basics of MIS Preparation for various Departments -
Engineering / Stores / Accounts / HR / Safety
Role of Site Accounts and Co-ordination with Head Office
03.45 pm 05.15 pm
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2. Overview and Relevance of Internal Controls at
the Construction Site and Role of a Project
Manager
Tendering
Budgeting
Site Mobilisation
Role of a Project Manager
Role of a Billing Engineer
Material Reconciliation
Project Completion
Release of Retention Money
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4. Lets see how to approach the job
Of :-
• Study of Tender Terms
• Planning – Budgets, Funds, Project Timeline through PERT,
CPM
• Lining up various functions
• Engineering
• Stores
• HR
• Accounts
• Safety and Quality
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5. Understanding the conditions of the tender
S. Details sought for Catch
N
1 Work order Value? Qty Variation not more than 25-30%.
Incentive / Penalty (0.5-5%)Clause.
1a Physical visit of the work locations Material Rates / Terrain for Equipments
/ Labour colony area / Distance from
city.
2 FIM - RMC / Cement / Steel? Wastage Norms, Debit Rates,
Location of Client Stores (From Loading /
Unloading perspective)
3 Work completion period Subject to drawings, front, resources
4 Facilities from the Client - Labour colony, Land, Power & Free or Chargeable. Single / Multiple point
Water supply. at site / At Labour Colony
Mobilisation Advance and Time Limit % given and recovery rate
5 Adhoc Payment against uncertified bills (75%) and Strict committment from client
status of remaining bill.
6 Check whether any prescribed format for client bill? Compliance with local laws
7 Whether the job is new or left over one? Investigation required if it’s a left
over job – Impact of Margins
8 Safety / Quality Norms info@consultconstruction.com on Time and Money
Impact
Formatting system of FQP
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6. Cont...
S.N Details sought for Catch
9 What are the requirements with each RA bill? Third Party Physical Certification
Reconciliation Statement of FIM
10 What are the rates of principal items (like Higher Margin in items to be executed
Excavation, RMC supply, Shuttering etc.) first
Apart from FIM, what are other items are
kept in client scope (e.g. False Ceiling,
Roofing, Aluminium Doors and Windows)
11 What deductions shall be made by client from Only those agreed as per WO
RA bill
12 Service tax / VAT / WCT extra or inclusive? Exemptions – Paper Work
13 Whether running plant expansion or If in running plant – Scarce area /
construction of new plant building? Pollution – Impact on Labour.
15 Internal Logistics Location - Porta Cabin / Client office /
Labour Colony / Batching Plant / Store
16 Bank Guarantee Amt / Performance / Time Validity
17 Always cry in front of the client, don’t
give any inputs about high margin items
18 Statutory Compliance Insurance / PF / CAR - Who’s scope?
So proper Site Investigation Reports needs to be prepared at Tender Stage
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7. You have received a tender from the
Client / consultant M/s XYZ for making
a 500 MW Thermal Power Plant in
Gujarat.
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11. • Cost Oriented Planning –
Convincing the EIC to prepare the Budgets is the biggest task. Because
the forces are so dynamic, actual scenario is expected to be different
from the work orders, hence he is not in a position to do so.
Most of the times he would argue that because of delay in submission
of drawings by the client, planning is not very easy.
But to meet the Project Deadline / it is in the best interests of the client
to break the work order quantities into monthly quantities.
Further an overall cap is required to be kept on the total quantities to
be consumed for the project. Monthly requirements can then be
prepared on the basis of monthly budgets.
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12. Congrats!
You have got a
work order
from M/s XYZ
Cement & Steel
in the state of
shall be FIM
Gujarat.
You have to
mobilise 500 Value of the
labourers in job is
20 Days from Rs.100cr
today.
Time deadline is
15 Months
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13. • Manual for Compliance Verification –
Whenever a new site is about to begin:-
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14. Budgeting
• Lets see a sample budget …
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16. [Mobilisation and Role of
Engg Dept]
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17. Mobilisation Checklist
• Statutory registration numbers / Good Local consultants
• Resource Mobilisation
– Equipments – JCB & Loader, Batching plant capacity, Miller, Crane, etc.
– Vehicles – Staff Bus, Sumo, Utility, Trailer, Tractor & Dumper, Bike etc.
– IT – Computers/Printer/Scanner/Copier/Internet/Telecom Network
– Functional Heads – PM / Store / HR / Accounts
– Office Stationery – Reports / Registers / Blank Slips
– From client – Power / FIM / Drawings / Work Front
• Staff Accomodation / Mess / Guest House
• Onsite office set up
• Lining up the labour
• Logistics – Movement to site from various locations
• Local Survey – Materials and Services
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18. Labour mobilisation Issues
• Special Points to be kept in mind for labour
mobilisation
– Areas where labour is available
– Initial cost of mobilisation
– Stay Arrangements
– Facilities offered by competitors
– Watch for the sudden movement of labour
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19. • The site is now mobilised and you
have to commence the work.
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20. Role of Project Manager
– Work Planning Daily / Weekly / Monthly:
When we plan for work – we need to keep in mind client priority, availability of
resources, availability of drawing & front, weather, Funds etc.
– Pre planning for FIM / Own Material:
Pre planning (system and procedure) is required for FIM and Own material so as
to make it available in time.
– Complete responsibility to ensure compliance of the functions by all the Dept.:
Engineering, HR & Admin, Stores, Accounts
– Sub Contractor Work Order:
Sub Contractor work order should be prepared on time with their acceptance.
– Timely submission of bills with due verification from QSD at HO, if any . If delay
reasons need to be submitted to HO.
– Subcontractor bills are prepared in due time and are paid after pre-audit at HO.
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21. Role of Project Manager – cont…
– Understanding of Site Performance both in terms of actual execution
and profitability and submitting regular MIS to head office.
– Ensuring proper back up in case if any employee leaves the
organization.
– Weekly meetings with the Core team and ensuring due preparation of
minutes for mailing the same to Head office.
– Checking all the records fortnightly viz. stores inflow, outflow, vehicle
logbooks, and HR records.
– To focus on all areas where chances of cost overrun exist by ensuring
regular monitoring.
– Maintaining employee morale under all situations.
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22. Reconciliation – FIM & Principal Material
• Standard Consumption norms to be defined for every item in the WO.
For e.g. – For 1 CUM of M20 - concrete production –
Cement – 140 Kg, Sand – 875 Kgs, Agg – 1100 Kgs
• Physical verification of Steel, Sand and Aggregate on the same day on which reco is
prepared.
• Material scattered at various locations
• Consumption for unbilled extra items to be excluded.
• Stock records to be updated regularly.
• Shuttering Repetitions.
If material consumption levels are found in excess of standards appropriate action
needs to be taken for further control and identification of sub-contractor
responsible for the same to enforce timely recovery.
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23. Materials Usage Standard
• Theoretical Qty * (1 + Normal Wastage Norms)
– Qty is derived from design and drawings
– Normal Wastage Norms also change from Project to
Project depending on nature of work, method of
application
– However Wastage from following is not a normal
wastage
• Using Non-Standard Material
• Excess Purchase
• Wastage in Transportation
• Improper Storage
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24. Billing Engineer
A. Client & Sub Contractor billing and Certification:
– Same Billing period for both client & sub contractor
• Match the Quantities
• Facilitate preparation of MIS
• Identification of Extra Items
– DPR should be generated.
– RA bill preparation on Time as any delay
• Affects Fund management
• MIS
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25. Sub Contractor Work Order:
Sub Contractor work orders should be prepared:
- Item code and language should as per client work order
- Project Manager and Project commercial head / Project Director
approval signs or mail required.
For example:
Item As per Item description UOM Rate
Code
1234 Client Providing reinforcement including cutting, MT 4500
bending, binding, fixing in position including the
cost of channels, bars (Binding Wire is in your
scope)
FIM or Raw Material shall be provided to contractor for work by Company:
1234-A Contractor Reinforcement Cutting MT 700
1234-B Contractor Reinforcement Bending MT 800
1234-C Contractor Reinforcement Fixing MT 1200
Contractor Total Rate of item code-1234 is ----> MT 2700
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26. • Engineering MIS
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28. Project Completion
• Checklist for Project Completion
– Final bill preparation and certification
– FIM and Raw Material Reconciliation with bill and balance qty.
– Fulfillment of client work completion procedure
– Receivable & Liability status & Clearance
– Statutory compliances
– Demobilization
– Delayed in project completion
– Work completion certificate
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29. Project Completion – cont….
Final bill preparation and certification:
• Cumulative Executed Quantity.
• All pending extra item claims should be included, if pending.
• Necessary follow up for W.O amendment if Actual Qty > WO Qty.
• Release of Qty on Hold for want of various reasons.
• Fight for the incentive clause.
• If any company asset is given on rental / hire basis to other party as
per instruction from client, the same should be claimed in final bill .
• If resources like equipment / manpower have remained ideal due to
non availability of front, it should be claimed in the final bill.
• NOC shall have to be obtained from various departments of the client
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30. Project Completion – cont….
FIM and Raw Material Reconciliation with bill and balance qty.:
Formula:
• Total Material Inward
• Less: Material Returned / Transferred
• Less: Standard Consumption
• = Balance Quantity at Site / Store
• In case this quantity is not available at site / store, there are following possibilities:
– Excess consumption as compared to standard
– Theft / Pilferage during the project
• In case of excess consumption, some portion can be recovered from measurement contractor if
not recovered till date.
• Proper justifications are required from project manager and appropriate action should be
taken in case of abnormal difference between actual balance and standard balance
• Balance FIM material started to returning and take its documents with receiving sign and
stamp from client.
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31. Project Completion – cont….
Fulfillment of client work completion procedure:
In case of project completion client have checklist for same so you have to ask same from client
and compile each point.
Receivable & Liability Status & Clearance:
Get status of project liability with break up of nature of creditor and special remark for local
creditors.
– Follow up for payment receivable from client after bill certification
– Clear local liabilities to avoid any demobilization harassment from them.
Statutory compliance:
Follow up and get pending WCT & TDS receivable certificates from client.
– Give all necessary details for VAT return filing to local sales tax consultant and other
details, if any required for audit.
– Get any pending forms like C & F from the department, also reconcile with the forms
issued till date.
– Clear o/s local pending liabilities like Road tax, Entry Tax, Employee Professional Tax etc.
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32. Reasons for Delay in preparation of Final RA Bill
S. N. Points Corrective Action
1 Non updation of FIM data with stores. Physical verification of FIM with stores
records
2 Reconciliation of FIM Required with each RA Bill
3 Work order Amendment Little foresightedness
Strong Followup
4 Change in Project Manager / Billing Engg. Documentation-JMR/BBS/Stores
Good Back up at HO
Handing over Checklist
5 Proper compilation of Hard and soft copies of all the Data Control and Regular Audit
Running Bills
6 Insistence to satisfy requirements of Labour Inspector – Clarity in Work Order Terms
If you are under EPC
7 Quality compliance after defect liability You should argue that it is client responsibility
8 Idling Claims depending on locations like Orissa / Record / Emails to client on regular basis
Kerela - Local problems
9 Direct Payments by the client Documentary Evidence
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33. Project Completion – cont….
Work completion certificate:
• Don’t forget to collect the work completion certificate from the client
Demobilization:
• Dehire all types of equipment and machinery.
• Make proper plan for shifting of own material to other sites / Central Stores.
• Proper plan to shift staff.
• Dehire idle camp / mess and do not forget to recover the rent deposit or set off deposit against
rent.
• Check, get and release Bank Guarantee from client after defect liability period is over
Planning - Lalu
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34. Release of Retention Money
• Checklist compliance
– Certification of Final bill
– Completion of work upto Defect liability period
– No local liability
– Site and area clearance
– Return of all FIM
– Premature Release Against Bank Gaurantee Till Defect
Liability
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36. Normally in a manufacturing set up we divide the material as :-
a. Repetitive Items
Raw Materials
Stores
b. Non – Repetitive Items
Capital Goods
Major Repairs
Primary purpose of classification is to Control:-
- Quality - Cost - Timely Supply
But how do we classify in the construction sector ?
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37. The most comonly used classification is ABC Analysis.
But prerequisite is that the project should have a standardized bill of materials
listing the physical quantities, unit rate and total cost for each item.
1. Identify the material required for the Project
2. Determine Usage Value by multiplying the Qty required and its Unit rate.
3. Calculate the percentage usage value with respect to the total material
cost for the project.
4. Arrange the Items in descending order of usage value
5. Give Red Colour till 70% and thereafter Green Colour till 90%.
6. Mark A class for Red Coloured Items / B Class for Green Colour and C Class
for the balance.
Lets see a small excel sheet on this.
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38. Use of ABC to Develop Policy Guidelines
Policy “A” “B” “C”
Consideration
Degree of Control Strict Moderate Loose
Forecast Accuracy Accurate Approximate Rough
Authority of Senior Level Middle Level At Site
Ordering
Purchases
Suppliers to be Maximum 3 to 5 Reliable 2 to 3 Local
contacted suppliers
Safety Stock Low Moderate Adequate
Order Frequency When Required EOQ Bulk
Follow up Maximum Moderate When Neccesary
Monitoring Weekly Monthly May not be
Material required
Movement
MIS Reports Weekly Monthly Random
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39. Inventory Planning
• The construction material Inventory Plan
aims at evolving materials stock-holding
levels to meet project execution plan, with
minimum investment on inventory.
• In typical project from Inventory point of
view , we may classify the materials as
follows:-
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40. • Take the case of stocking of cement at the site :-
– Site Requirement – 500 Bags / Month for 12 Months
– Order Cost – Rs. 500 per order
– Carrying Cost – 10% of unit rate
– Transport Capacity – 100 Bags
– Lead Time – 5 Days
– Safety Stock – 100 Bags
– Material Life – 2 Months
– Unit Rate - Rs. 250 per bag
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41. • EOQ –
1 / Unit Rate *
{Square Root of (2*Order Cost*Unit
Rate*Site Requirement/Inventory Carrying
Cost)}
1/250 * {Square root of (2*500*250*6000/0.1)}
= 500 Bags
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43. Commercial Procurement
i) Goods cont…
Goods:
Define a Purchase Policy
Purchases to be sourced by Head office.
Purchases to be sourced locally with approval from Head office.
Purchases to be sourced locally with the approval from Project Manager.
Material required for Project:
Project Manager to calculate total project material requirement through
Bill of Quantity (BOQ).
This would be categorized as FIM , Raw / Principle Material,
Consumable / Hardware / Tools Material, Capital goods - Plant /
Machinery / Equipment
Monthly Requirement
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44. Commercial Procurement
i) Goods cont…
Placement of Order (PO): - Purchase order being the last document of
procurement process, so it is necessary to take care before placing the order.
Certain details which need to be mentioned
Serially numbered
Time & Place of Delivery
Material Quality Description and specifications
UOM
Manufacturing date should be latest and not more than two months in
case of certain items like Conplast / Admixture (To get maximum time of
its utilization)
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45. Commercial Procurement
i) Goods cont…
Materials Indents:
Authorized person should be allowed to raise an indent. The status
about present level of stock should also be given.
Market Survey / Enquiry / Quotation:
Relevant journals, yellow pages, market directories etc.
Company can ask quotation / price list with detailed terms and
conditions with its validity from various vendors.
Purchase department can take right decision after comparison and
analysis of rate, quality, terms & conditions with price escalation
terms and service condition
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46. Stores Related Controls - Material Issue /
Receipt / Reconciliation Methods / Physical
Verification Plan
At a Construction Site
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47. Store Team with Experience
• Store manpower depends on size of project, volume of
material and stock movement and logistics.
• For a small site following if the ideal team
– Store Incharge 1 = Master Degree / Specialization of store course and
5 years work Experience
– Store Assistant 2 = B. Com / 12th passed and 2years work Experience
(Material Chaser)
– Data Entry 1 = Bachelor / Certified Computer Course degree and
2 years work Experience
– Helpers 5 = Material loading & Un loading, Cleaning &
maintenance
Computer literate with basic knowledge of
identification of item, UOM & inward / outward
procedures
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48. Well Defined work Area
• Store personnel at Site should not be used
for other works like
– Sourcing of Vendor
– Market survey
– Creditor payment
– Any other site functions like HR / Admin
activity / Cash Mgmt / Taking measurements
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49. Store Cycle
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50. Stores Premises
• Stores Premises–
– GI Sheets / PCC Structure properly covered
– Door and Window for Lights & Ventilation
– House keeping (cleanliness)
– Fire extinguisher
– Rack for stacking of material
– Weight machine (Capacity least 100kg)
– Power connection
– Computer system with Printer & UPS
– Security guards at various points of store locations
across the site
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51. Setup of Stores
• It is suitable for proper control and supervision that stores
should be near to
• Batching plant,
• Steel Yard,
• Contractor office
• Client store for best logistics
• Store Location should have adequate space to facilitate
material storage and physical verification.
• Also open space near stores is required to park
Equipments and Vehicles (JCB, TM, Tractor, etc.)
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52. Stacking & Labeling
• Stacking of Material: -
- Material not to be kept directly on ground (1ft above surface) - Rain
- Liquid Items should be tightly covered in order to avoid wastage
- Cement / Wooden Items need to be covered by Tarpoline for safety
against rains
- Arrangement on the basis of frequency of usage and in order of
priority
- Single item to be put at single place instead of multiple locations
- Easily countable (Proper policy for Bulk Items)
• Safety to be ensured:-
- Heavy material on surface / lower height & light weighted material in
rack
• Label should be affixed on rack on each items with Material code
(Additionally item description would be preferable)
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53. Inventory Level & Local Procurement
• Inventory minimum and maximum level
should be defined as per monthly Budget
quantity, mainly for A Class Items.
• Store not to procure the material under normal
cases .
• All local procurement department after
approval from HO and as per defined policy.
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54. Relationship with supplier
• Mgmt to ensure and check from time to time the
relationship of store personnel with supplier –
– If Frequent visits to supplier premises
– Material Inwards to be checked by Site Engineer on
Surprise basis
– Material Receipt in day time
– Quantity should not be left blank in supplier challan
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55. Security Agency / Guard
• Stores should be backed by security personnel
– Deployment of Guards as per requirement with proper
uniform, stick, whistle & torch at store in two shifts.
– Duty register / Card duly signed by store Incharge
– Incident register (In case of theft)
– Surprised visit should be carried out by HR incharge, specially
during night
– Surprised visit report required with monthly bill of external
agency.
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56. Material Inward
• I) FIM Material Inward–
A) Steel :
– Challan should have our indent number / date / quantity with
weight slip.
– Weight should be carried out at the time of material unloading.
– Qty should always be mentioned as per dia and as per no.s and it
should be kept dia wise in steel yard. Dia wise steel record and no.s
measurement will also help in cross verification of weight as per
defined ISI standard
– Dia wise record will facilitate FIM reco
– Client should inform about the dispatch of FIM in advance
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57. Material Inward Continue..
B) Cement : (FIM Material)
– Inward should be on weight and challan also have quantity in
numbers of bag.
– Weight should be carried out at the time of unloading (Powder
form).
– This net weight quantity should be mentioned as received with
mention of damaged bags in challan and the same should be
conveyed to client / supplier store.
– Also in case of rain/fog, if material is received without proper
cover, the fact needs to be mentioned on the challan
– Store should verify no. of cement bags and ensure proper stacking
at time of unloading itself.
– Control on Empty bags is required
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58. Material Inward Continue..
C) RMC (Ready Mix Concrete): (FIM Material)
– Client may give RMC instead of cement
– Physical received and challan / slip quantity should be the same
– Any difference needs to be communicated to the client on a regular
basis. This is the case when client has outsourced RMC production.
– Further monthly reconciliation should be done to resolve the
dispute, if any.
– Special Precautions required if multiple agencies are working at the
client location.
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59. Material Inward Continue..
• II) Procured Material Inward:
Sand & Aggregate / Boulder & Ruble:
– Sand & Aggregate preferably to be purchased on CFT basis. Also
advisable in rainy season.
– CFT basis material should be measured every time by three point of
vehicle and considered average area and this quantity mentioned
as received in challan
– Boulder / Rubble on MT basis due to voids
– These items should be delivered by supplier with proper intimation
– Materials would be delivered during day time
– Location of Weigh Bridge
– In rainy season stock would be store of Sand & Aggregate for any
short fall and avoid to pay more cost
– Royalty slips
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60. Material Inward Continue..
• II) Procured Material Inward:
– Binding Wire should always be weighed at the time of inward and
its thickness should be matched as per order. No. of Bundles should
also be mentioned in the challan.
– Conplast / Admixture - Inwards with manufacturing & expiry date
and number of drum and the same should be visible on each drum
– Wooden material:
• Plywood = This should be as per specification given in PO like
thickness, weight per sheet, regular or water proof, size, qty. in
numbers and sq.ft.
• Batten = Batten size should be as per specification of PO like thickness
& length, Abnormal damage & short length pieces should not be
allowed and the qty should be mentioned in CFT in challan
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61. Material Inward Continue..
• III) Returnable Material Entry:
• If any material, equipment or items are to be sent out, client
procedure and documents should be followed with all records
to avoid any delay in project completion.
– Material entry gate pass
– Inward stamp with date and time and sign of authorized
– Material description with quantity etc..
• Any improper inward could prove costly for the company in
future.
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62. Material Inward Continue..
IV) Loan Transaction:
• This happens, where more than one contractor work in the same
client premises.
– This type of transactions should be done by site Project Manager in
emergency case only and with approval from his higher authority.
– This is returnable basis so the same should not be outstanding for
more than specified days and should not be a routine practise.
– Quantitative document should be generated and kept in record
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63. Material Inward Continue..
• V) Basic documents at the time of Material Inward :
– Documents - Challan / Packing list / Inter-site Transfer Memo / Excise
Gate pass / LR / Weight slip / Royalty Challan / Test certificates / PO
copy or PO references / Tax Invoice / Statutory forms (If any).
– Authorized sign required if overwriting available.
– Mention of Short quantity & unmatched specification
– Material inward stamp & Entry in material inward register / system &
Unique inward number on documents
– No material shall be dumped without pre intimation to store and
presence of store person.
– Rejection Policy
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64. Material Outward
• Codification of materials
• Divide the materials into Capital Goods / Construction Materials / Consumables
and Tools.
• Codes as per class of material.
• Material Issue Slip
– Duplicate
– Authorised from Site Engg.
– Basis of Computer Entry
– Watch on Missing serial numbers
• Steel, Sand, Agg., etc consumption entry should atleast be passed as per RA Bills certified
quantity.
• In case of emergency /break down of batching plant if RMC procured from other sources,
then FIM Cement can be issued to supplier and rate should be excluding cement.
• Returnable register to be kept separately. Material required in same form from receiver
• Computer System to have Alternate UOM provision – E.g. Wooden Items, Sand, Aggregate.
• Free And Chargeable Materials List with stores.
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65. Non Moving material
• Store should not allow those material which are not required
or
• excess quantity compare to required at site
• Disadvantage of non movement items –
– Staff engagment
– Cost of logistics & Inventory carrying cost
– Space usage of store
– Problem to Handling / Take care
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66. Site visit by Store personal
• Store personal should visit site on every day
for following purposes:
– Idle material
– Damage & Scattered material
– Ensure that no material is lying in mud or in
excavated holes, before back filing (Especially
scaffolding material like coupler, pipes &
shuttering plate etc..)
Lemon
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67. Physical Stock Verification
• Compliance to
• A Class routine audit
verification every queries.
quarter and • System report
• other categories should not contain
every six months. any negative items.
• System report
System Print should be clear like
A-B-C Bills received but
after Updated
Identification goods not received
Data entry.
Ensure that
material
Physical count movement is
challenges restricted
before taking
• Scaffolding / physical stock.
Shuttering – • Proper Stacking
Rough Idea and labelling
• Steel, Sand, Agg –
Expert estimate
• Multiple
locations
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68. Control over Fuel Consumption
Following points need to be taken care for Equipments - JCB, Miller, and
Crane / Vehicles:-
• Store should have resources like –
– Fuel pipe, Filter & pump to fill fuel from one to another can,
– Two standard size Barrels of 200Ltrs capacity,
– Fuel small Can of 1ltr, 5Lts, 10Ltrs
– Scale to measure balance stock of fuel (Rod)
• Lock and key - Fuel tank
• All vehicle and equipment Meters should be in working condition.
• MRN containing authorisation from Project Manager & HR Incharge for fuel issue
with vehicle & equipment number.
• Physical meter reading should be verified and mentioned in log sheet at time of fuel
issue.
• If vehicle permanently work at single location, name of location is compulsory.
• Vehicle Report - MIS.
• Tracking fuel given on chargeable / Free issue basis.
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69. BTN
• Whether such system exists at the client
place
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70. Other Areas -
Scrap Yard
Items in Scrap yard should be
properly segregated as per
nature and length to enable re-
use.
Frequent Disposal of scrap
Items required.
Distribution of Scrap wood
amongst labour
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71. MIS
• MIS report, its format and period should be defined.
Following reports required fom store:
– Material Movement for the period
– Intersite Material Movement
– Fuel Transaction report with party wise
– Safety material movement
– Chargeable Material / Debit Note
– RMC Production & Principle items consumption
– Physical Stock
– Non Moving Material
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72. Human Resource
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73. HR Related Controls - Labour Colony / Mess /
Attendance / Vehicle Management
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74. • Sub – Contractor Management
– Sub-contractor Data bank on the basis of skill
set and past performance.
– Incentive scheme for time bound completion
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75. Human Resource – cont….
Master Details of Sub Contractor:
• Two passport size color photograph
• Name with firm name
• Copy of PAN card without which TDS liability shall be @ 20% in
place of regular rate
• Identity poof
• Address proof (Election Card, Latest light bill or Panchayat
certified letter)
• Communication details (Like, Landline / mobile with contact
person & Fax number, mail ID, Web site)
• Bank name, Branch address, Account type, Account number and
RTGS No., cancelled cheque or declaration letter from the bank
• Specimen signature of authorized person in absence of the
main sub contractor .
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76. Human Resource – cont….
Labour Over time:
There should be proper system to record the duty hours in the labour
card:-
• Contractor name and labour name
• In time and out time
• Company supervisor sign for allowing OT who shall also be responsible
to reply why OT was allowed.
• Track of supervisor sanctioning highest OT
• Labour / sub contractor sign is required
Daily report & Control – Labour:
• HO must ask for manpower report and work progress report from Site
on a daily basis to assess the work performance.
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77. Human Resource – cont….
Gate Pass (GP) / Entry Card:
• Company must issue Gate Pass (GP) / Entry card for control and security purpose to sub contractors
and all employees and labours. The same can be cross checked with daily manpower report to catch
discrepancy if any.
• Following details are required in the gate pass:
– Unique serial number and area / Period wise color if any
– Name of labour
– Sub Contractor name
– Type of skill (Helper, Carpenter, Mason, Fitter)
– Date of GP issued and validity (Validity would be three months)
– Blood Group
– Color photograph through Web cam and color printer
– Company may charge some nominal amount for GP
– Sign required of HR and sub contractor on Gate Pass
– HR should have details of gate passes issued in the manual register where GP receiver sign is
required. HR should have GP wise status (Active, Cancel, Expired)
– Penalty should be charged If Gate pass is lost, expired but not renewed or not returned at time
of leaving the job
– All Gate Passes should be destroyed which have been returned by workers / sub contractors
after proper entry in manual register or system
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78. Human Resource – cont….
PF Records and Liability payment:
• If the sub-contractor is well organized, then he can pay PF and keep proper records and
just deliver paid challan with its break up for your record.
• But where Sub contractor is unorganized, it is necessary to get sub contractor wise
wages sheet to calculate PF liability and pay.
Labour Colony / Water & Power supply:
• Labours are asset for the company and it should take care of their basic needs.
• This should be the responsibility of HRD
– to visit labour colony at fixed interval to find out if their living conditions are proper
– Basic aspects like PCC in flooring of room,
– Drinking & routine use Water,
– proper toilets and bath rooms,
– power supply, cleaning around labour colony to ensure it hygienic, monthly medical
check up etc.
This will result in improved performance in the labour output.
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79. Human Resource – cont….
– Employees
Salary Structure & Letter of Appointment:
• Salary Structure: Say
– Basic – 40% of total salary
– Other Allowances 60% of total Salary, like:
• HRA Allowance
• Uniform
• PF
• Bonus
• Medical Allowance or Group Mediclaim policy
• Transportation Allowance
• Telephone / Conveyance Reimbursement
• Child Allowance
• Education Allowance
– Deductions:
• PF employee contribution – 12% of Basic
• Professional Tax – Employee, as per salary slab
• Tax Deduction at Source (TDS) as per Government rules on taxable salary
• Staff Welfare Fund as per Government rules
• If any bond amount decided, to deduct from salary on monthly basis
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80. Human Resource – cont….
• Master Form - Employee:
• Branch / Site Transfer Letter:
– Salary Structure
– O/s Advances and Loans
– o/s Salary Dues with present days of last working days at
previous site
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81. Human Resource – cont….
Daily Attendance - Staff:
• Daily attendance can be marked by manual records like - Register or Daily
Sheet or Card or by Auto systems like Punch card, Thumb or Finger impression
or based on any other online software,
Over Time:
• There should be well structured Policy to regulate and monitor the over time
payment.
• There are two options to maintain OT records
– a) Out time to be mentioned in Daily manual attendance sheet
– b) Separate Sheet to be maintained for OT
HR needs to take sign from Project Manager on daily OT sheet or Daily
attendance sheet. At the end of the month, OT hours shall be calculated on the
basis of this record.
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82. Human Resource – cont….
Leave Policy:
• Leave policy needs to be defined
– Various types of leave and their number
– Carry forward or lapse in the year end
– Encashment
– Maximum accumulation etc.
Further employee needs to fill a leave application form containing following details:
• Leave application vs. Daily / Monthly Attendance sheet
• Leave period and number of days
• Applicant signature required on form
• Approving authority depending on number of days leave applied
• Leave utilized mentioning clearly against which category (i.e. Paid Leave - PL, Casual
Leave - CL & Sick Leave - SL) on application
• Status of leave balance category wise as per rules
• To avoid misuse of sick leave, medical certificate must be required on return from
leave if the leave is more than say one or two days
• Absent should be marked for extension of leave beyond sanctioned
• HR should verify perfectly about leave balance before action on application
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83. Human Resource – cont….
• Hired Camp
– Lease Agreement
– Distance from the Site
– Proper Planning to avoid Hotel Expenditure
• Mess - Staff:
– Self vs Contracted
– Fixed Payment to employees
– Policy should also be defined for other facilities of stay and in house entertainment by
way of TV, reading materials, sports and club activities etc.
• Group Employee Health Insurance Policy:
– HRD needs to evaluate group medical policy v/s medical allowance. It is advisable to go
for mediclaim Insurance for which policy should be well defined.
– Accordingly all concerned employees and officers should be covered as per policy which
should be taken from General Insurance Company with full negotiation.
– There should be one officer in charge for claim settlement in time so as to get the benefit
of the Insurance.
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84. Human Resource – cont….
• Vehicle Report
• Admin Assets & Control
• Laptop
• Data Card
• CUG Mobile connections – SIM card
• Mobile Instrument
• Camp / Guest House & Mess, Vehicles, Equipment etc.
HR should have master data of details of all admin assets and this should be updated on
regular basis
(Monthly / Quarterly / Half yearly) like
– Name of asset
– Asset user name
– Location
– Insurance period and Service provider, if applicable
• Company can take undertaking from employee against asset given for use. There should be
well designed policy in place about entitlement to regulate the use of such assets.
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85. Human Resource – cont….
• HR – MIS
Level of Perfection
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86. Statutory Compliances required at the
Construction Site
Labour Law Requirements
Labour License – Minimum Wages
PF / ESI
Workmen Compensation
Worker’s cess
Minimum Wages
Professional Tax
VAT Provisions
Documentary Requirements
Difference between VAT and WCT
What is Entry Tax?
Check Post Related Issues
CST Provisions
Service Tax Provisions
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87. Labour License
• Two authorities to be approached – Centre / State
• Any unit belongs to Central Govt, then license to applied to
Central Government
• Form No. 4 to be applied for before commencement of
work.
• It is applicable on client to client basis.
• After Initial Declaration, there is a provision to increase the
number, but no provision to decrease.
• Security Deposit for Gujarat Govt is Rs. 270/- per worker
and Centre is Rs. 90/- per worker.
• On completion of work – Taken Work Compl. Cert from
Client and submit to License Authority
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88. EPF Act
• Applicability i) Every establishment in which 20
or more persons are employed and
• But Across India, there is only one EPF Number.
For ease of administration you may ask for a sub-
code.
• No. of Labour on which EPF is paid should not be
more than sanction as per Labour License
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89. Eligibility
• Any person who is employed for work of an
establishment or employed through
contractor in or in connection with the work
of an establishment.
• Basic Salary more than Rs. 6,500/- not
covered.
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90. ESI Act
• provides for certain benefits to employees in case
of sickness, maternity and employment injury.
• It applies to all factories (including Government
factories but excluding seasonal factories)
employing ten or more persons and carrying on a
manufacturing process with the aid of power or
employing 20 or more persons and carrying on a
manufacturing process without the aid of power
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91. Coverage and contribution
• The existing wage-limit for coverage under
the Act, is Rs.15,000/- per month
• Currently, the employee’s contribution rate
(w.e.f. 1.1.97) is 1.75% of the wages and that
of employer’s is 4.75% of the wages
paid/payable in respect of the employees in
every wage period
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92. • Construction Sites – ESI does not apply
• But Insurance by way of WC Policy is
advisable.
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93. Workmen’s compensation Act, 1923
• The Workmen’s Compensation Act, aims to
provide workmen and/or their dependents
some relief in case of accidents arising out
of and in the course of employment and
causing either death or disablement of
workmen.
• It provides for payment by certain classes of
employers to their workmen compensation
for injury by accident.
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94. Employer’s liability
• The employer of any establishment covered under
this Act, is required to compensate an employee :
• Who has suffered an accident arising out of and in
the course of his employment, resulting into (i)
death, (ii) permanent total disablement, (iii)
permanent partial disablement, or (iv) temporary
disablement whether total or partial, or
Who has contracted an occupational disease
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95. THE EMPLOYER SHALL NOT BE LIABLE
• In respect of any injury which does not result in the total
or partial disablement of the workmen for a period not
exceeding three days;
• In respect of any injury not resulting in death, caused by
an accident which is directly attributable to-
– Place of occurrence is outside site premises and not in connection with
the works
Further two more issues need to be kept in mind subject to certification
from the authority
– the workmen having been at the time thereof under the influence or
drugs, or
– the willful disobedience of the workman to an order expressly given, or
to a rule expressly framed, for the purpose of securing the safety of
workmen
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96. Building and Other
Construction Workers' Welfare Cess Act,1996
LEVY AND COLLECTION OF CESS. -
(1) There shall be levied and collected a cess for the
purposes of the Building and Other Construction Workers'
(Regulation of Employment and Conditions of Service) Act,
1996, at such rate not exceeding two per cent but not less
than one per cent of the cost of construction incurred by an
employer
It is applicable to all contractors – working for state or for
private sector.
Enforcement in the private sector is very poor.
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97. Minimum wages Act, 1948
• Wages for Centre ( –or
• Wages for State (Unskilled – Rs. 135.40)
• Whichever is higher
• Every 6 Months, the govt declares special allowance which
needs to be added
• Same Rate for Male and Female
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98. Professional Tax
• Corporation Level Subject
• Registration required for all the branches
• Whether Construction Site is a Branch?
• Payroll Generated from Head office
• For Casual Workers the provision does not
apply
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99. Shop and Establishment
• Does not apply to construction site
• But it applies to establishment
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100. VAT
• Composition
• Format of Invoice / Charge of Taxation
• Input Tax Credit
• Check Post Related Issues
• TDS
• Forms from Department
• Inter-State Movement
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101. Types of composition
• For complete contract
– within 30 days of commencement of Work
• For Complete year
– Application within 30 days before to commencement of year
• For New Registered Dealer
– Within 90 Days from the effective date of registration
No condonation of delay – Matter Pending before Tribunal
Non receipt is assumed as granted
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102. Format of Invoice
• Under Composition
• Retail Invoice
• Tax Invoice
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103. VAT – Input Tax Credit
• ITC available on all inputs used in works contract other than composition method
subject to fulfilment of conditions
• Broad Restrictions on ITC:
‒ CST purchases
‒ Capital goods used in works contract – Some of the States
‒ Lease goods
‒ Goods purchased from Lump sum dealer
‒ Goods not connected with business
‒ Vehicles, equipments, accessories or spare parts
‒ Fuel used in motor vehicles
‒ Goods used as fuel in generation of electrical energy
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104. Entry Tax related issues under VAT
Inward Movement
1. Cement / Raw Steel / Motor Vehicle are liable to entry tax.
2. Authenticated Form 403 is required.
3. Invoice / delivery challan / LR to be made available at checkpost
4. For normal Items, Form 403 without authentication is required.
5. Scaffolding Pipes are not covered.
Outward Movement
1. Branch Transfers – Work Order / Declaration Form / Form 402.
2. Relevance of F Form – Ambika Steel.
3. Having registration / Work order from other state.
Any checkpost related issues ?
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105. C Form / Way Bill / Entry Tax
• Transfer of materials from one state to
another.
• Multi State VAT Compliance
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106. TDS Rate under GVAT
Person responsible for payment exceeding Rupees 1 crore for
works contract is responsible for deduction of tax at prescribed rates
TDS Rate : 0.6% in case of construction contract and 2% in case of others
Works Contractor is mandatorily required to obtain TDN No. from Commercial Tax
Department. Application in Form 706 to get TDN No. within 30 days of agreement.
TDS to be claimed in the year in which same is deducted and not in which the same is
?
paid.
Form 702 under Gujarat VAT to be attached with Invoice for lesser deduction.
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107. Inter-State Movement of Material
• Movement of Raw Material
• Movement of Finished Goods
• Use in Works Contract
• Payment of CST / VAT
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108. Service Tax
• Concept of Centralised Registration
• Method to be opted
• Cenvat Credit
• Invoice Related Issues
• Service Tax vs VAT
• Point of Taxation
Smart CA
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110. Control Points for Equipments
Own vs Hire
Transit Miller Scaffolding Pipes
Batching Plant Shuttering Material
Concrete Pump Walkway Jali
Crane Clamps
Excavator Other support structures
Tractor Trolley
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111. Commercial Procurement
i) Services
Equipment / Machinery / Plant / Tools provide by Client:
• Condition of equipment – Third party can be appointed
• Maintenance scope
• Operation of Equipment
• Round the clock Availability
• Advisable to clear the commercial aspects for supplies beyond the
scope as this might result in recovery from the contractor.
• Transportation point for FIM & Transit risk within the site.
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112. Equipments - Purchased
Advantages of buying -
• No dependence on others.
• Company’s status & capacity as a contractor will be rated high .
• Equipment can be moved from place to place as per requirement.
• Bigger jobs can be obtained.
Disadvantages of buying –
• Working capital gets blocked.
• Repayment in time is big a responsibility.
• Resell value shall be negligible in case the same is not required
• Maintenance cost and expertise will be required to run the equipment
smoothly.
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113. Equipment - Hired
Hiring Agreement: The user pays fixed hire charges on daily or monthly basis as long as the
equipment is held by him,
• Hire the equipment & machinery
• Minimum average commitment required in case of Vehicle and equipment & machinery
• Rate should be on hours basis excluding lunch / dinner hours to avoid OT over head.
Advantages -
• Need not to invest the FUND
• Claim as expense for Income Tax purpose
• If service, maintenance and operational cost is in supplier scope, no any handling issue and
cost and that means peace of mind
• In case of business close down, no headache except to return the equipment
Disadvantages -
• Company totally dependent on others
• Hired equipment does not enhance company’s status
• In case of under utilization, it will result in big loss
• Company will depend for Service / repair & maintenance on supplier
• Without supplier’s permission, equipment can not be moved to other site
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114. Buying or Hiring
• Buy – Value * 4 Times should be the
turnover.
• Future Planning – Residential / Commercial
/ Industrial / Power
• Debt : Equity ratio should not be more than
2:1.
• Buy – Own O&M Team, Driver
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115. Cost of owning an Equipment
• Depreciation
• Cost of Capital
• Equipment Operating Cost
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117. Transit Mixture on Hire
Equipment control points in case of Hired:
Transit Mixture
• 1 Make, Size / Capacity & other specification if any
Example: a) Make - Schwing Setter, b) Capacity - 6 M3,
• 2 Age of equipment In Good working condition and less
than 5years
• 3 Team - Qualified Operator / Driver, Crew member &
Maintenance team Team: Qualified Operator / Driver - 1,
Helper - 1 & Mechanic for Maintenance - 2
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118. Transit Mixture on Hire
• 4 Testing / Calibration / Commission certificate - Required
from third party whose Govt. approved person / agency?
No, But Water Pump should be in working condition with
water tank.
• 5 Insurance of Equipment / Chassis / Vehicle / Operational
team & Third party YES
• 6 Guidelines / Manual for user with Equipment YES,
Optional
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119. Transit Mixture on Hire
• 7 Self certified photocopies of RTO documents of
Equipment YES
• 8 GPS System Recommendatory, However required if more
than two millers at the site with wide area.
• 9 Equipment with Basic things Hours & Kms meters in
working condition, Proper number Plate / identification
mark, Front, Break lights in working condition with
Mirrors, night radium plate / colors, First aid, Tools &
tackles
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120. Transit Mixture on Hire
• 10 Minimum Expected Output per month Needs to be decided for each
and every project - Suggestible Qty - 2000 CUM
• 11 Hiring approx. amount. Monthly Basis - Rs.1.25 Lacs (Excluding
Fuel)
• 12 Minimum Working Duration in a month Flexible 260hrs in a month
(Note 3)
• 13 Fuel & Power, Oil & Lubricants a) Its advisable to ask the supplier
to quote his rate with Fuel. Oil and Lubricant should always be in
supplier scope. b) If fuel is in our scope then avg consumption norms
may be fixed. Fuel consumption per hour as per site experience.
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121. Transit Mixture on Hire
• 14 Daily Log Book / Records Supplier to maintain
daily log book / records with sign of both -
operator and Company authorized person.
• 15 Lock & key & Daily Records custody? If fuel is
in the scope of company, Fuel Tank Key and
Records should lie with the company.
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122. Transit Mixture on Hire
• 16 Minimum Output performance clause of equipment Depends on
batching plant setup & destination of structure.
For e.g. 18 M3 casting per hour
If TM takes 20min for one trip. Then 3 trips in one hour
= 6 M3 per TM x 3 trip in one hour. 17 Attendance The operating team
should be available at the site during the working days. The bill shall be
reduced proportionately in case of absence. (Monthly Billing Amt / 26 *
Absent Days). 18 Overtime clause OT shall start after expiry of flexible
hours limit in the month and shall be calculated on pro rata basis
(Monthly Rate / 260 Hours).
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123. Transit Mixture on Hire
• 19 Incentive clause Volume based and other points like - lower break
down, Safety during the work etc.
• 20 Equipment maintenance / Break down clause Permission for
maintenance on any 4 half days in a month or as and when it is free
after discussion with site PM.
• 21 Staff / Team Accommodation & Fooding clause Staff / team
accommodation shall be provided by us But Food shall be in your scope
• 22 De Hiring Notice Period 7days on both sides to avoid any dispute.
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124. Transit Mixture on Hire
• III ) Billing & Payment:
23 Mobilization & Demobilization clause
a) Mobilization = i) Within 10days from date of WO
(mail or hardcopy) with all required resources. ii) One
month mobilization advance to be recovered in six equal
monthly installment.
b) De Mob. Cost = If Contract is more than six months
than in lessor's scope. 24 Billing & Certification cycle
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125. Transit Mixture on Hire
• 24 Bill Submission = Billing on monthly basis. to site PM within
5days of previous month with sign, stamp & inward date from
company. In case of failure to get inward stamp or received sign,
Accounts shall not accept the same.
b) Bill / Supporting = Main bill in triplicate copy with company
name, address & site, WO number, Bill date, period, name & make of
equipment. All statutory numbers, break up of taxes, OT with proper
calculation, incentive if any. Original Log sheet (Duplicate copy must for
your records).
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126. Transit Mixture on Hire
c) Bill Certification = Bill shall certified within a week from the date of invoice /
inward with stamp and authorized sign & name by company. 25 Payment cycle
Payment shall be made within 20days from the date of bill certification 26
Debit / Recovery clause in case of break down or non performance / Any other
damage Normally at time of certification or separately if issued by any other
department or client for any non-compliance. 27 Local / RTO tax in scope of
supplier All statutory (local / RTO etc.) liabilities in your scope, inclusive of
rate. Service tax shall be paid extra. 28 TDS & any other Statutory deduction if
any TDS or any other statutory deductions as applicable shall be deducted.
D) Safety: 29 Clearance and data for Gate / Entry Pass Requirement of the
principal client may be mentioned here. 30 Safety rules & regulation, violence
& Penalty Requirement of the principal client may be mentioned here with the
penal clauses, if any.
IV ) Legal: 31 Clause - Child labour Strict Compliance 32 Clause - Termination of
Contract In case of non compliance of any condition and delay in work
performance, contract shall be terminated immediately without any cost. 33
Jurisdiction Jurisdiction is Ahmedabad only
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127. Role of Site Accounts and Co-ordination with
Head Office
Changing Def’n - Democracy
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128. Model of Accounting – Branch / Centralized
• The model most prevalent, provided you have good team of accountants with
you is the HO and Branch Model.
• Branches maintain accounts at the construction site itself. Because if we have a
smart accountant at the site that would serve as the best internal control
measure.
• Integration of accounts and Inventory would then be possible.
• Complexity involved is you then need a perfect co-ordination between HO and
Branches. Reconciliation between the two is required on a regular basis. As
many a times HO would directly be making payment to Branch’s creditors
without routing the same through the branch.
• In case of centralised accounting the certification systems have to be perfect.
You would need all the documents to be certified by the Site Incharge and
respective area incharge before booking the same in accounts.
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129. Role of Site Accounts
• Preparation of cash vouchers and entry into the system.
• Maintaining Bank book with not more than one day
transaction lag.
• Documentation of purchase bills after comparison with
P.O and entry into the system.
• Entry of subcontractor bills – Co-ordination with the
engineering dept.
• Working out weekly cash requirements
• Entry of debit notes in contractor accounts: -
Executory • Debit notes from Stores.
• Debit notes from H.R
Functions: - • Debit notes from Engineering Dept.
• Periodic entry and payment of statutory dues
• TDS – self-assessment and monthly payment.
• PF – Payment in co-ordination with H.R
• Service Tax – Preparation of input credit details
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130. Role of Site Accounts – cont….
• All vouchers need to be authenticated by the
accountant.
• Vouchers carrying amount more than Rs.10K need to be
authorized by PM.
• Comparison of sub-contractor bills with Work orders.
• Ensuring that Full and final payments are made to the
contractors and employees only after getting a
completely filled Work Termination Form.
• Making payments against bills only after getting them
pre-audited.
Control • Ensuring that Subcontractor Master details are available
before his first bill is entered in the system.
Functions: - • Sending backups to HO on a weekly basis.
• Ensuring periodic reconciliations in the following
manner :-
• Intersite – Reco on a fortnightly basis.
• Bank – Reco on a monthly basis.
• Supplier – Reco on a monthly basis.
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131. Role of Site Accounts – cont….
• Preparation of Labour supply bills.
• Preparation of documents/letters as required.
• Submission of bills to the client.
• Sending Original Work orders / LOI / amendments to HO after keeping
Administrative copies.
• Ensuring original TDS certificates are sent to Head office.
Functions : -
• Other site Co-ordination.
• Monthly profit centre performance reports.- 20 days
• Weekly Cash & Bank summaries.- 2 days
• Monthly liability statement. – 20 days
• Monthly vehicle reports.- 5 days
• Report on TDS deduction every month. – 25 days
Reporting • Quarterly Service Tax input credit details. – 10 days
Functions: - • Pending sub-contractor bills on a fortnightly basis for the previous months
duly authenticated by the project manager. – 2 days
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132. Role of Site Accounts – cont….
• Accounts MIS
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133. Role of Site Accounts – cont….
• Onsite Integration Model for a Construction Site
Using cloud servers, access can be given to multiple locations
without buying any software / hardware.
Stores Material Receipt entry can be passed from the site provided
there is a proper internet connectivity.
When the purchase Invoices are received the same are certified by
the stores department and the printed MIN is then attached behind
the invoices.
Accounts then enters the rates of materials picking up the tracking
number. Any deviations are settled by way of Debit / Credit Note.
Materials are then issued by way of Delivery Note to either the
client / sub-contractors.
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134. • Payment Advice Format
Site :_____________ Date :________________
B) Supplier of Capital D) Rent ( Labour Colony / Room E) Vehicle Hire / Petroleum
Sr.No. A) Supplier of Material Goods C) Sub-Contractors / House ) Suppliers
1 Purchase Order Purchase Order Work Order Rent Agreement Log sheet
2 Tax Invoice Tax/Retail Invoice RA Bill L.C. visiting Reports - HR Auth.-Commercial/H.R.
Authorization from Authorization from
3 Authorization from Site EIC Project Director Commercial Dept. Authorization from H.R. Authorization from Site Incharge
Authorization from Project Authorization from Authorization from Authorization from Commercial Authorization from Project
4 Director Commercial Dept. Project Director Dept. Director
Stamp of Quality & Bill Entry in books of accounts
Authorization from Commercial Installation from Site Authorization from Site Authorization from Project with Deduction (maintenance
5 Dept. Incharge Incharge Director /spare parts... )
Bill Entry in books of Debit notes receive &
accounts with all entered from Stores
Stamp of Quality & Qty. deduction (TDS / VAT & (Safety material) & Bill Entry in books of accounts Bill / Voucher / Supporting
6 verification from stores Other) H.R.D. (G.P.'s) with Deduction (TDS ) Proper filing
Bill Entry in books of
accounts with all
Reconciliation of Material Bill / Voucher / deduction (TDS / Bill / Voucher / Supporting Monthly Vehicle Report of
7 against Client Billing Supporting Proper filing Retention ….) Proper filing payment month
Bill Entry in books of accounts
with all deduction (TDS/VAT & Receive party's Bill / Voucher /
8 Other) Confirmation Statement Supporting Proper filing Supplier master form Supplier master form
Receive party's Confirmation Client vs. Subcontractor Authorization from Internal Authorization from Internal
9 Statement with Reco. Status of excise credit Qty. Auditor Auditor
Whether Against "C" EIC Performance Report
10 Whether Against "C" Form Form for the site
13 Remarks required if On Account or Advance: -
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O. use Remarks
135. Banking – Whether centralized or Branch wise
• We are presently in a world where banks are all connected, so we may opt for a
Centralized banking system, but then if you have a HO and the Branch Model,
you need perfect controls in place before the HO releases funds.
• Payment Authorization Vouchers – A system that can be implemented, similar to
controls that we have in SAP.
• Further if we have to plan the funds and ensure that funds generated from a
particular site are available for only that site after HO takes out its share of profit,
then it is advisable to have separate accounts for the branches.
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136. Managing the Financing Needs of the business
• Limits with the Bank – Fund Based / Non-Fund based.
• Non-Fund based Limits are of great importance in the construction sector, as for
any Project that is about to begin, the client is willing to give Mobilisation
Advances against Bank Gaurantees.
• Hence as a consultant you can fight hard with the bank to secure best terms in
the Non-fund based limits. With a good order book you can get away by giving
25-30% collateral to some of the private banks in the market.
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