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Quantity Survey
What is a Quantity Survey?
A quantity survey, also known as a bill of quantities (BOQ), in the construction industry is a detailed analysis and estimation of all parts, materials, and costs associated with a construction project. This process is carried out by a professional known as a quantity surveyor. The surveyor evaluates the quantities of materials needed, required labor, groundwork needed, and the overall time frame of the project. They also consider other variables to provide an accurate cost analysis, like the complexity of the project, the potential risks, and the market conditions.
The main purpose of a quantity survey is to:
- Accurately estimate the cost of a construction project: By quantifying all the required materials and resources, the quantity survey helps contractors and clients estimate the total cost of the project accurately. For subcontractors specifically, quantity surveys are used to price out the cost of their portion of the work, ensuring they quote competitively while accounting for all the necessary materials and labor.
- Facilitate bidding and tendering: The quantity survey provides a standardized format for subcontractors to prepare their bids based on the same information, ensuring fair competition during the tendering process.
- Control project costs: During the construction phase, the quantity survey serves as a reference point for monitoring and controlling costs, as actual quantities used can (and should) be compared against estimated quantities.
- Manage changes: If the original scope of work changes or varies, the quantity survey serves as a baseline for evaluating and negotiating the cost implications of those changes.
A quantity survey is essential for subcontractors to accurately estimate costs, plan resources, and manage project scope. While not directly integrated, solutions like Siteline allow subcontractors to leverage quantity survey data to streamline their billing processes.
- Subcontractors can generate payment applications in Siteline that reflect completed work items and quantities from the survey, minimizing disputes.
- Some clients use Siteline's billing and A/R reports to help quantity surveyors and estimators account for contractors with longer payment cycles. They can either increase bids for those contractors to offset delays or revise terms to penalize late payments.
- Siteline also seamlessly tracks change orders, enabling subcontractors to easily update payment applications and lien waivers when project scope changes, keeping everything documented and billed accurately.
By bridging the gap between contracted scope and actual billing, Siteline enables subcontractors to focus on execution while ensuring prompt, accurate payments. Experience the power of efficient payment management tailored for subcontractors. Schedule a demo of Siteline today.
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Other construction terms
What is an Accounting Equation?
An accounting equation is a fundamental principle in the field of accounting, reflecting the relationship between a company's assets, liabilities, and equity. For the construction industry, it's vital as it aids in understanding the financial stability of a project or the entire firm. The equation is typically expressed as Assets = Liabilities + Owners Equity. It helps construction companies balance their books by ensuring that resources, such as building materials (assets), are funded either by external loans (liabilities) or investment from the business owner(s) (equity). This equation provides a snapshot of the company's financial health, informing potential investment decisions and credit extensions. It is also vital for measuring performance, spotting financial discrepancies, and planning future construction projects. In summary, the accounting equation acts as a financial tool in the construction industry, ensuring companies maintain a balanced and healthy financial status.
What is Top-of-Chain or High-Tier?
Top-of-Chain or High-Tier refers to the superior position in a hierarchical structure within the construction industry, often denoting the entities or individuals who have the utmost authority or control. This could involve top-tier construction companies, project managers, stakeholders, or contractors who handle major decisions and oversee the whole project operations. These high-tier participants are responsible for ensuring the project is executed according to the plan, budget, and timeframe. They manage sub-contractors, labor crews, purchase materials, and communicate with clients. Their decisions have significant influence on the project's success. Being at the top of the chain, they often bear the highest level of risk, but also stand to make the most profit.
What is the Matching Principle?
The Matching Principle is a crucial accounting concept prevalent in the construction industry. This principle dictates that all expenses must be matched with the revenues they generated in a particular financial period, ensuring that all costs and income for each project are accurately reported on the income statement. For example, if a construction company incurs costs for labor, materials, and equipment in July and August for a project that's completed in September, those costs would be recorded in September when the income is recognized. This principle is essential as it provides a more accurate picture of a company's profitability and financial health for a specific period. It allows construction companies to better manage their cash flows, project budgeting, and financial planning.
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