Construction Management Contracts

Construction Management Contracts are used when your business has the client contract managed on an “Actual Cost” basis with the client taking the risk and some portion of the work charged at agreed rates. This is also referred to as construction on an "Open Book Basis". With these contracts you may take a small risk for the preliminary items and have an agreed rate of recovery for selected services such as Project Management on an hourly basis.

If this is how you contract then Muli's Construction Accounting Software can help your business by using a “Complementary Projects” approach. 

You would establish one project on an Actual Cost basis with the client, where the budgets equal the agreed target prices of the client. In this project the income = expense so there is no profit.

Then you link this with a second or complementary project which invoices the first project for Management Fees and possibly some of the Preliminaries at agreed rates. This Management project would include the contribution to profit and any gains or losses that flow on to the company.

You should investigate our PROJECTS, BUDGETS & VARIATIONS module.

If you prefer to WATCH rather than to READ, then our "Demonstration Video 108 - Construction Management Projects" shows how Muli has functionality specifically for Construction Management Contracts.