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the
necessary reconciliation between Cost Control
How to split activities between
systems
(commitments) and finance (accounting),
Accounting and Cost Control
and definition of the accruals, need to be led by one
The Accounting function is required in any organization
function clearly defined as being in charge,
for a number of reasons including statutory compliance,
Financial reporting over different legal entities,
financial control, treasury and tax. It
variable foreign exchange rates,
responds to necessary short term,
taxes, etc. should be exclusively
reactive requirements: payment of
Failure to appropriately separate
managed by the Finance
invoices, cash flow, treasury etc. It is
Accounting and Cost Control will
function
(the
breakdown
important to make sure that
lead to severe dysfunctions in
structure will have been setup
responsibilities are clearly split
particular a lack of proper project
so as to facilitate this reporting
between Accounting and Cost
forecasting
by capturing cost and revenue
Control.
per legal entity).
The particulars of project activities
2014-02 rev 0b
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Cost Control
Maintenance of project
cost model (time-phased,
native currency)
Cost
forecasting
(Estimate
At
Completion (EAC))
Contingency
management
Develop and maintain
project
break-down
structure
EAC variance analysis
Trending and analysis
Determination
of
sensitivities
Commitments control
Participate
to
reconciliation
to
determine accruals
Accounting
Revenue / profit
recognition
(Percentage
of
Completion
(POC)
method)
Accounting periods
close-out
Accounting
ledger
maintenance
incl.
invoices treatment &
payment
Cash
flow
management
Currency hedging /
transfers
Inter-entity
billings
(inside organization)
Tax
Drive reconciliation
with Cost Control to
determine accruals
2014-02 rev 0b