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Overview
As a real estate development company, Perimeter Corporation deals with the
improvement of land for residential purposes. This involves earthworks, building of
infrastructures, such as roads and waterways, and all other construction activities necessary
to prepare the land for house construction. All these are the companys land development
and construction processes, the entirety of which forms part of the Perimeters construction
or conversion cycle.
The conversion subsystem covers Perimeters accounting system activities from
initiation of the land development project to the preparation of the post-construction reports.
The subsystem is divided into two minor subsystems: the development & construction and
construction cost accounting subsystems. The development and construction subsystem
involves the planning, scheduling, engineering and carrying out the project. Specifically, this
includes the preparation of cost estimates and construction schedule, requisition of the
different cost components based on the prepared budgets and schedules, the usage of these
components and eventually monitoring the flow of the components as the development in
progress moves through different phases of the construction process up until completion. On
the other hand, the cost accounting subsystem comprises the tracking and accounting of
costs incurred as materials, labor and overhead are used in the performance of the different
tasks related to the development and construction project. Due to the peculiar nature of the
business, the type of cost accounting adopted is modified to cater the accounting needs of a
real estate development company like Perimeter. Case in point, each development project is
treated as a cost unit. Cost of materials, labor and overhead used during development are
construction costs included in the cost of developed land. Total cost of the developed land is
then divided depending on the number of lots to be sold to buyers.
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Project Manager
5. Receives AMR via system notification
6. Evaluates request:
a. If approved, enters the authentication code for approval.
The system automatically updates the approval and notifies the Materials
Controller Warehouse.
a. If not approved, rejects AMR and specifies reasons for further processing by
the Project Engineer.
Logistics Department
Materials Controller Warehouse
7. Receives approved AMR via system notification.
8. Prepares through the system the Materials Issuance Report (MIR) in accordance with
the approved AMR.
9. Enters authentication code for issuance.
The system automatically notifies the Warehouse Personnel.
Warehouse Storage Personnel
10. Checks availability of the requested construction materials and supplies in reference
with the MIR.
a. If available, prepares the available construction materials and supplies for release.
b. If not, notifies, via system, the Purchasing Department of the requested materials
and supplies not available at the warehouse.
(Please refer Expenditure Subsystem Task _: ___________________________)
11. Prepares Materials Transferred Out (MTO) in accordance with the construction
materials and supplies issued via the system.
12. Issues MTO to Inventory Clerk by entering the authentication code.
The system automatically notifies the Inventory Clerk.
13. Forwards materials and supplies to Warehouse Delivery Personnel
14. Issues Time Ticket (TT) to the Warehouse Delivery Personnel
15. Logs starting time of delivery.
Finance Department
Inventory Clerk
16. Receives notification of the MTO.
17. Retrieves from system the WMR and MIR.
18. Reconciles the MTO with the WMR and MIR.
19. Updates the Inventory Master File Warehouse and Project Cost Ledger.
Task 4: PREPARATION OF MANPOWER SCHEDULE
Planning and Engineering Department
Project Manager
1. Receives notification from the Board of Directors of the
2. Retrieve from file the Detailed Cost Estimates (DCE) and Development &
Construction Schedule (DCS)
3. Starts preparing the Manpower Schedule (MS) via the system
The system automatically notifies Planning and Engineering Manager.
Development and Engineering Manager
4. Receives notification from the Project Supervisor.
5. Retrieves DCE from system
6. Reconciles MS with DCE
b. If consistent, enters authorization code for approval.
c. If not, informs Project Supervisor of the inconsistencies and asks reason for
deviation. Evaluation and compromise is done.
Task 5: PREPARATION OF TIMECARD FOR EMPLOYEES AT PROJECT SITE
Development & Engineering Department
Site Supervisor
1. Collects timecard from employees at project site after work
2. Updates the Employee Worktime File Project Site (EWF-PS) in the system
3. Prepares Weekly Construction Work Progress Report (WCWPR)
4. Forwards WCWPR to the Project Manager via system on a weekly basis.
The system automatically notifies the Project Manager.
Project Supervisor
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Timekeeper
1. Receives a Request for Heavy Equipment Usage (RHEU) via systems notification
2. Records the number of hours and days the requested equipment will be used for a
particular construction work of the development project in the Equipment Usage Log
(EUL)
3. Records on daily basis the actual number of hours the equipment was used for the
construction work in the EUL
4. Prepares a weekly Summary of Heavy Equipment Usage (SHEU) with the EUL as
reference
5. Forwards SHEU to Machineries & Equipment Custodian via system
The system notifies automatically the Machineries & Equipment Custodian
Machineries & Equipment Custodian
6. Receives weekly SHEU from the Timekeeper via system notification
7. Prepares an Annual or Monthly SHEU
The system automatically updates Annual and Monthly SHEU every time a weekly
SHEU is prepared and forwarded to the Machineries & Equipment Custodian.
8. Keys in the total number of hours the equipment was used for the entirety of the
development project
The system automatically computes and allocates depreciation expense of the
equipment. Once depreciation expense is determined, Construction Machineries and
Equipment and Actual Overhead Ledger are immediately updated.
Task 9: RETURN OF EXCESS CONSTRUCTION MATERIALS AND SUPPLIES
Logistics Department
Materials Controller Project Site
1. Prepares unused construction materials and supplies after completion of the
development project
2. Prepares Materials Return Report (MRR) containing data of excess materials and
supplies present at the project site after development project has been completed
Warehouse Personnel
8. Receives MRR from Materials Controller Project Site via system notification
9. Receives excess materials and supplies from the Delivery Personnel
10. Prepares Receiving Report (RR) based on the receipt and examination of materials
and supplies
The system automatically notifies the Materials Controller Warehouse
11. Transfer materials and supplies for examination by the Materials Controller
Warehouse
Materials Controller Warehouse
12. Receives notification from Warehouse Personnels RR
13. Goes to the where the excess materials and supplies were transferred
14. Retrieves MRR from the system
15. Reconciles the MRR and RR with the actual materials and supplies
16. Examines quality of the excess materials and supplies received
a. If quality standards are met, approves MRR and RR by entering authentication
code
The system automatically notifies Inventory Clerk. Returned materials and
supplies are then kept in the proper storage.
b. If not, prepares QCR to be approved by the Project Engineer. QCR cancels MRR
and RR.
The system automatically notifies the Materials Controller Project Site of the
QCR.
Finance Department
Inventory Clerk
17. Receives approved RR and MRR via systems notification
18. Updates the Materials Inventory Master File Warehouse and Project Cost Ledger
Task 10: PREPARATION OF COST OF COSNTRUCTION REPORT
Finance Department
Cost Accountant
1. Retrieves cost information regarding materials used, labor rendered and overhead
from respective system master files.
2. Prepares Cost of Construction Report (CCR) per development project using the
retrieved files as references.
The system automatically compiles financial information from each cost component
and computes total per development project.
3. Forwards CCR to the Controller via system
The system automatically notifies Controller.
Controller
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