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Contractor Estimating and Accounting Systems
When negotiations between the government and a contractor are taking place, a conventional estimating system becomes necessary. The DOD policy mandates every contractor to have an estimating system. Moreover, the policy places a requirement to maintain, disclose, and support the estimating system's review on every contractor (Semaan & Salem, 2017). In the wake of technological advancements in the last few decades, the industry has benefited differently, such as innovations. Contractor estimating systems have a positive effect on how business is conducted and determine the achievement of goals. Accounting systems are also essential tools for contractors. These are systems of procedures and methods that have been established to record, analyze, interpret, and show, among other activities, timely and accurate data on financial statements. They are used in decision-making and compliance with regulations and laws.
Literature Review
Today, companies and firms have been forced to move towards automated systems that use specialized software and activities. Accounting systems and contractor estimating have become essential tools for contractors in their line of operations. According to Lambart (2018), these tools are essential in determining the feasibility of a project and help achieve the goals set and fulfill the vision that a company or project hopes to achieve.
Accounting systems are valuable tools in managing expenses, income, and other activities that are finance-related. With accounting systems, a company, firm, or contractor can keep track of every financial transaction, such as the sales, liabilities, and purchases. Moreover, accounting systems are designed to generate comprehensive financial reports that give the contractor, management, and any interested party a precise data set helpful in making decisions. Another essential aspect of accounting systems is a review of an accounting system...
Erroneous estimates have severe consequences for both parties involved since it translates into extra costs. A well-prepared estimate helps to draw a proper budget that the contractor operates within, all the way to the completion of a project. In general, a well-prepared estimate helps the contractor avoid making losses in the long run and maximize profits.
Findings
Estimating systems have become popular over the last few decades with the increase in technological advancement and innovations. Contractor estimating systems provide valuable solutions in the industry, so the increasing popularity is not mysterious. As a result, many contractors have embraced it. With these systems, accuracy is no longer an issue, especially in the fluctuating and competitive economy. Under such conditions, keeping track of expenditures in terms of equipment and materials and other budgetary expenditures is critical to the success and profitability of any project (Alshanti, 2017). Estimating systems provide the necessary tools to keep track of essential data and establish the closest total cost of the project to be undertaken.
The estimating systems are also helpful and applied to manage a project better. It enables a contractor to manage their project better since the operations can be appropriately aligned with the…
References
Al-shanti, Y. A. E. R. (2017). A cost estimate system for Gaza Strip construction contractors.
Geiger, D. R., & Ittner, C. D. (2019). The influence of funding source and legislative requirements on government cost accounting practices. Accounting, Organizations and Society, 21(6), 549-567.
Lambert, R. A. (2018). Contracting theory and accounting. Journal of accounting and economics, 32(1-3), 3-87.
Semaan, N., & Salem, M. (2017). A deterministic contractor selection decision support system for competitive bidding. Engineering, construction, and architectural management.
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