How do I set the accounting method for a contract?
Background
In Procore, the accounting method on a prime contract, purchase order, or subcontract can be set to one of the following:
- Amount Based
Choose this method to enter a lump sum amount for a line item on a Schedule of Values (SOV). - Unit/Quantity Based
Choose this method when ordering materials in quantity. With this method, users enter a quantity and unit price for the line item on your SOV and Procore automatically calculates the total for the line item for you.
Important
- If you are using the project's Tendering tool, you can also set the accounting method of a tender package. See Configure Advanced Settings: Tendering.
Answers
When setting the accounting method for a contract, there are several things to consider:
- When can I configure the accounting method?
- Who can configure the accounting method?
- How do I configure the accounting method?
- How does a contract's accounting method affect change orders?
- What do I need to consider with Unit/Qty based contracts?
When can I configure the accounting method?
Always configure the accounting method before you add line items to a contract's SOV. After you add line items, a contract's accounting method cannot be changed.
Who can configure the accounting method?
Depending on the contract type, users with 'Admin' level permissions on the project's Commitments and/or Prime Contracts tool.
How do I configure the accounting method?
You can configure the default accounting method for one or both of the contract tools.
| Tool Name | To configure the default accounting method for a tool |
|---|---|
| Prime Contracts | Configure Advanced Settings: Prime Contracts |
| Commitments | Configure Advanced Settings: Commitments |
You can also configure the default accounting method on an individual contract
| Contract Type | To configure the accounting method for a contract |
|---|---|
| Prime Contract | Edit the Advanced Settings Tab on a Prime Contract |
| Purchase Order | Edit the Advanced Settings Tab on a Commitment |
| Subcontract | Edit the Advanced Settings Tab on a Commitment |
You can also configure the default accounting method for tender packages.
| Tool Name | Header Column 4 |
|---|---|
| Tendering | Configure Advanced Settings: Tendering |
How does a contract's accounting method affect change orders?
A change order must always use the same accounting method that is configured in the prime contract, purchase order, or subcontract. Contracts and change orders cannot use different accounting methods:
- If a purchase or subcontract is set to Unit/Quantity Based, all Commitment Change Orders (CCOs) for that purchase order must be Unit/Quantity Based. You cannot have an Amount Based CCO when a contract is Unit/Quantity Based.
- If a prime contract is Unit/Quantity Based, all Prime Contract Change Orders (PCCOs) for that contact must be Unit/Quantity Based. You cannot have an Amount Based PCCO when a contract is Unit/Quantity Based.
How does a contract's accounting method affect data exports?
When you export an individual prime contract, purchase order or subcontract or change order, Procore exports only the fields that are relevant to the accounting method set on the contract. For example, if you have an Amount Based prime contract, unit- and quantity-related fields cannot be exported. This is also true for change orders and invoices related to that prime contract.
What do I need to Consider With Unit/Quantity Based Contracts?
If you decide you want to use the Unit/Quantity Based accounting method on a contract, keep the following in mind:
- The Subcontractor SOV tab is NOT available.
- The 'Materials Presently Stored' column is NOT included on the contract's invoice.
- You can use the 'Subtotal Override' option on a line item to use the Amount Based accounting method on that line item.
- When the override option is ON, the invoices for the contract will bill for the dollar amount.
- When the override option is OFF, the invoices for the contract will bill for quantities.