In the financial management of engineering projects, financial managers should strengthen fund management, cost control, tax planning and invoice management. The following is my collection of papers on how to establish an effective financial system in general contracting of projects, hoping to help you!

Abstract: The general contracting mode has been widely used in the field of construction engineering. The application of EPC mode plays an important role in improving the quality level of construction projects and reducing investment costs. This paper mainly expounds the financial management system under the project general contracting mode from four angles: fund management, cost control, tax planning and invoice management, for reference.

Keywords: general contracting; Financial system; build

Overview of engineering general contracting

EPC general contracting, that is, design-procurement-construction general contracting. In recent years, owners have paid more and more attention to the comprehensive service ability that contractors can provide, and EPC general contracting management mode has been favored in the international project contracting market for its unique advantages. EPC general contracting projects generally have the characteristics of large amount, long construction period and high technology content, which can bring huge profits to enterprises, but there are also significant financial risks.

Second, the importance of financial management of general contracting projects

While strengthening the financial management of general contracting projects, achieving the specific objectives in the financial management of general contracting projects will have a certain impact on controlling the investment cost, schedule control and cost control of general contracting projects. Therefore, it is very important to strengthen the management level of financial management in combination with the actual situation of general contracting projects in order to achieve the goal of maximizing the profits of general contracting projects in practical work.

Third, the countermeasures to establish an effective financial system under the general contracting mode of the project

(1) Do a good job in fund management.

1. Strengthen the supervision of project fund receipt and payment with the guarantee of fund management.

In the financial activities of general contracting enterprises, funds have always been high-value and highly liquid assets. Therefore, finance should do a good job in the following three aspects:

(1) Improve the fund management system and the project fund guarantee mechanism.

During the implementation of the general contracting project, the fund collection and payment cycle is relatively concentrated, the amount of funds is relatively large, and the project lasts for a relatively long time. First of all, in principle, the general contracting enterprise should adopt the mode of centralized account management and special project funds, and establish a set of measurement, confirmation, approval and payment procedures for project funds and related expenses. Secondly, in order to ensure the effective implementation of the general contracting project cost collection and payment system, capital access system, operation process, approval procedures and post responsibilities.

(2) Establish communication channels for on-site financial management.

After the signing of the general contracting project contract, the project financial manager should be appointed in time, the responsibilities and rights should be clearly defined, and the project account should be established in time; Ask the financial manager to communicate with the owner's counterpart department at the first time to confirm the relevant procedures and communication channels of financial management of Party A and Party B; The financial manager is required to go to the tax authorities where the project is located to handle the tax registration of off-site construction, so as to ensure that the invoicing and tax payment are carried out from a normal financial perspective during the project period.

(3) Strengthen the management of project financial fund plan.

Within two months after the project starts, the plan for the use of construction funds and the plan for the use of equipment and materials procurement funds shall be prepared; According to the cost estimate and construction plan, the annual construction fund plan and the annual equipment and materials procurement fund use plan should be formulated; According to the project management fee and other control indicators approved by the engineering management department of the general contracting enterprise, the annual management fee fund use plan is prepared, and the monthly management fee and other expenses fund use plan is prepared in combination with the project progress and actual needs on site.

2. Coordinate to raise funds and ensure the supply of funds.

Any general contracting project, regardless of its size, needs funds as a guarantee.

(1) project advance payment

Advance payment management includes two aspects: the owner pays the contractor and the contractor pays the subcontractor. Ensuring the timely and full advance payment is the capital foundation for the general contracting enterprise to ensure the smooth start of the general contracting project. In the aspect of collecting advance payment, financial personnel should assist the project manager to issue advance payment guarantee in time, improve the procedures and collect advance payment. In the aspect of advance payment, the financial personnel should assist the project manager to obtain the advance payment guarantee in time and pay the advance payment as soon as possible after completing the internal payment examination and approval procedures, so as to ensure the pre-construction cost of the project and the capital demand for equipment and materials procurement and reduce the financing cost of the enterprise.

progress payment

Timely collection and payment of project progress payment is the premise for general contracting enterprises to ensure the smooth implementation of general contracting projects. The general contracting enterprise submits the monthly report of project progress settlement in time according to the actual workload every month, and the financial personnel cooperate with the cost engineer to assist the project manager to submit the settlement information to the owner in time according to the actual workload confirmed by the monthly acceptance, actively communicate with the owner to create settlement conditions, handle project settlement, issue invoices and receipts, pay taxes and collect progress payment.

Own funds or borrowed funds

Self-owned funds refer to the funds that are often held by enterprises for production and business activities and can be used at their own discretion without repayment; Borrowed funds refer to the funds obtained by enterprises in the financial market by raising funds from fund providers according to law, using them according to the contract and repaying them on schedule. Because there are many risk factors in the implementation of general contracting projects, the demand for funds is large. Therefore, when using self-owned funds or borrowing funds, financial personnel should assist the project manager to carefully analyze the potential risk factors of using such funds, whether they can be safely recovered, and whether the recovery time limit will affect other aspects of production and business activities.

3. Supervise the process of using funds and improve the efficiency of using funds.

General contracting enterprise finance should supervise the whole process of capital use to reduce the cost of capital use. According to the comprehensive plan for the use of project funds, the funds are centrally managed, and the expenditure of funds received in advance is strictly controlled according to the examination and approval procedures to ensure the orderly flow of funds.

(2) Strengthen effective cost control and improve the economic benefits of the project.

The effective control of project cost requires the full participation of all project participants, and the cost control mainly involves the following aspects:

1 Strengthen design management control

Engineering design drawings and documents are the main basis for the following stages in the project implementation process. The level of design management and control is directly related to the safety, progress, cost, quality and material control level of the project, and also directly affects the operating profit of the project. Therefore, the cost control in the design stage is the focus of the whole project cost control. When carrying out quota design in the design stage, designers should strictly implement the quota design working procedures to ensure the realization of quota design control objectives.

2. Strengthen the management and control of equipment and material procurement.

The whole process of equipment and material procurement services provided by the materials department for the project as stipulated in the contract; Including making purchasing plan, determining the list of qualified equipment manufacturers, purchasing, expediting, inspection, transportation, on-site material management and purchasing subcontracting management. Project procurement should ensure that the required equipment, materials and related services are obtained at reasonable prices and appropriate supply sources according to the quality, quantity and time requirements of the project. In the specific implementation process, it is necessary to shop around through bidding procedures, compete fairly, and strictly control exclusive supply.

3. Strengthen construction management control

Construction management is an important part of project management. After completing the on-site construction task and handling the handover procedures in the middle of the project, the on-site service will be carried out in the trial operation stage until the project is examined and accepted. The purpose of construction management is to control "safety, quality, progress and cost", and the center of construction organization design management planning must focus on four major controls.

4. Strengthen the internal cost control of the project department

Because the site of the general contracting project is not in the location of the enterprise in many cases, the internal cost of the project department is mainly composed of temporary facilities and other expenses and the internal cost of the project department. The key point of cost control lies in the controllable expenses within the project department, such as travel expenses, other expenses, material expenses, labor insurance expenses, etc. The project department takes corresponding control measures to strengthen internal management, reduce controllable expenses and improve the economic benefits of the project.

(C) to strengthen the tax planning of general contracting projects

1 Strengthening accounting and tax planning

In practical work, relevant financial personnel should comprehensively inspect the specific situation of financial management of general contracting projects before the construction of general contracting projects begins. Make reasonable tax planning for the detailed work such as "project receipt and payment", "management fee expenditure" and "loan management" that will be involved in the financial work of general contracting projects. In a reasonable financial accounting range, the investment cost of general contracting projects will be reduced to the maximum extent, and the economic benefits of enterprises will be increased.

2. Pay attention to the provisions on tax clauses in the project contract.

In the stage of signing the contract, it is necessary to make certain tax planning for the specific content of the contract. In the financial management of general contracting projects, it must be clear whether there are tax-exempt projects and the relevant procedures for tax-exempt projects. When dealing with contract work such as cost plus remuneration, it is also necessary to clearly state in the contract that all taxes and surcharges related to the project cost shall be paid by the owner.

Fourth, do a good job in invoice management.

The general contract invoice consists of three parts: equipment value-added tax invoice, Jian 'an invoice and design service invoice. There are two situations: first, before the general contractor obtains the general taxpayer qualification, the general equipment contract follows the principle that the equipment manufacturer directly issues VAT invoices to the owner, which is convenient for the equipment manufacturer to issue invoices to the owner. Finally, except for some sporadic invoices, the remaining amount is uniformly issued with Jian 'an invoices. Second, after the general contractor has obtained the general taxpayer qualification, all invoices for the general project contract will be provided by the general contractor, which is conducive to the general contractor to sign the subcontract independently and ensure the reasonable profit of the general contractor.

In short, in the financial management of engineering projects, financial managers should strengthen fund management, cost control, tax planning and invoice management. Only by constantly strengthening the financial management level of general contracting projects can we better promote the construction quality of projects and the sustainable development of enterprises. Financial managers must realize the problems existing in the financial management of general contracting projects, and take effective measures in the shortest time to improve the financial management level of general contracting projects in combination with the actual situation of enterprises.

refer to

[1] Cao. Research on Internal Accounting Control of Construction Projects [D]. Northeast Petroleum University, 20 10.

[2] Cai Anhui, Li, Financial accounting practice of project general contracting [M]. Beijing: Economic Science Press, 20 10.

[3] Wang Wuren. EPC project general contracting management [M] Beijing: China Building Industry Press, 2008.

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