I'll give you an example: it's like investing $100,000 today, and then reporting $10,000 per year for 12 consecutive years. It looks as if it is profitable. 120,000 minus 100,000 = 20,000. Can be measured in accordance with the net present value, assuming that the interest rate for the same period is 5%. The net present value of the measured results is -1.1367.; internal rate of return is: 2.9229 (lower than the same period interest rate) such a project is actually a loss. Because tomorrow's 10,000 and today's 10,000, it is impossible to simply add up. And to measure in the calculation of this point in time, all the rate of return with the net present value of the investment.
Project loss basis
1, contracting measures do not match
Some projects, in the contracting program, the completion of the number of tasks in the number of wages, but the consumption of materials and equipment, the use of maintenance, there are no clear requirements, the formation of the package does not include material, package surplus does not include loss, and finally is the task is completed, but the cost of materials cost overruns, the decline in the performance of equipment, the whole project! The whole project is in the red.
Some project departments, although in the contracting program to clarify the unit volume of work included in the materials and machinery costs, but the material price than the contracting program in the material price is high, thus leading to contracting abortion; some project departments, although the contracting program is reasonable, but the billing is not timely, or can not be honored in accordance with the contracting program, so the contracting can not be carried out.
2, no cost control objectives or simply do not implement
The vast majority of loss-making project department, there is no cost control of the overall objectives, some have but not strictly enforced, and thus the cost of the project department in an out-of-control state.
A project department in the project after the commencement of construction, the project cost prediction, and determine the cost of sub-projects, classification costs and total cost of the project objectives. When the project was completed, in addition to the fixed costs (including the management fee submitted, the depreciation of fixed assets withdrawn, overhaul costs) and other items did not exceed the measured cost, labor, materials, fuel, fittings and the project department overhead and other variable costs, all of which are overspent.
The most significant of these is the overspending on materials and fittings, whose actual cost is more than 50% higher than the measured cost. Even taking into account the increased cost of design changes and costing all the increased budgeted costs of the changes, the actual costs were more than 30% higher than the measured costs.
Why fixed costs can be controlled, but variable costs are not controlled? The problem lies in the lack of strict implementation of the overall goal of cost control, the control of sub-project costs and categorized costs are not implemented, resulting in total cost overruns.
3, materials, accessories system is not fully rational
(1) over-purchase
In the loss-making project department, the purchase of materials, accessories (hereinafter referred to as materials) without a plan abounds. If the experienced material personnel performs the purchasing task, the quantity of materials purchased is not too much over and will not cause too much loss and waste. Part of the project department, especially the loss of the project department of the material personnel have no experience to talk about, the procurement of materials is very casual, over the quota to buy common, the number of purchases all lies in the project director or even the material staff, the result is bound to be the backlog of materials, overspending.
(2) artificial price manipulation
In the material procurement stage, the high price and the quality of some materials do not meet the standard, is another factor in the project loss.
Because of the development of the market economy, the prices of materials are ever-changing, no matter any experienced materials personnel are difficult to grasp the relatively reasonable price information, coupled with the unit selling materials (hereinafter referred to as the seller) to attract the purchasing staff by using kickbacks, favor fees and so on, thus making it difficult for the project department to purchase the relatively reasonable price of the materials, raising the material costs of the project. If individual purchasing personnel intentionally cheating, the price of materials will be deliberately increased to profit from, the project department will lose even more.
Additionally, due to the lowering of the credit rating of some enterprises and the need for cash turnover, the seller is very concerned about whether to buy materials in cash, so that the price difference between cash and non-cash purchase of materials is large, up to a difference of more than 10%. And the project department, due to financial constraints, or the purchasing staff will not calculate the cost of capital in the process of purchasing materials, and ultimately purchased high-priced materials, thus increasing the cost of the project.
(3) Substandard quality
Again, because some purchasing personnel know little about the quality standard of materials, purchased some materials that do not meet the quality standard, making the actual consumption of materials increased, resulting in cost overruns.
(4) receiving and dispatching system is in vain
In the stage of material acceptance, storage, warehousing, some projects have no receiving and dispatching system at all, the material purchasing personnel to buy materials no one acceptance, and no physical account, and thus can not talk about the storage and warehousing; or although there is a system of receiving and dispatching, but the acceptance of the untimely, not seriously, the storage of the same as a sham, the account does not match, who takes who uses the last one The last account is written off.
Particularly sand and gravel, masonry and other ground materials, some project departments from the beginning to the end of the management of no special department, to purchase instead of consumption; serious and even reimbursement of false material invoices, but did not buy materials.
(5) not according to the quota of materials
In the stage of material consumption, most of the loss-making project department is not according to the quota of materials, the construction personnel to give as much as possible, resulting in the issuance of materials are not wasted thrown in the construction site, is the site of the personnel to sell secretly, many can be recycled waste even more unmanaged. Such as the site of the remaining steel and steel templates unauthorized disposal, and will recover the amount of materials for private sharing.
4, there are loopholes in subcontracting works
(1) for labor subcontracting team, there is no implementation of strict quota issuing system, resulting in the arbitrary use of materials, resulting in material overruns;
(2) for subcontracting team construction of some of the processes of the amount of repeated pricing, resulting in the over-allocation of funds for the project;
(3) for subcontracting the project price is very arbitrary, no recalculate the price of the subcontracted works in accordance with the quota and budget standards, and only set a random percentage of the management fee to be withdrawn and then everything will be fine, and the management fee withdrawn in the end is not enough to compensate for the expenses incurred in the bidding;
(4) not taking into account the winning price and subcontracting out the works at a price higher than the winning price (which is not the reason why the winning price is on the low side), thus resulting in a huge amount of losses;
(5) using a large number of subcontracting teams, resulting in over-allocation and subcontracting of works. team, resulting in over-allocation, subcontracting team arrears and other phenomena continue to occur;
(6) a number of external units, only symbolic to collect a little management fee, and finally the unit is gone, all the aftermath of the costs (such as the duration, quality, the unit in the name of the project department to buy materials owed to the purchase of the purchase price and so on) all the project department to be borne by the project department.
5, serious quality problems
Losses serious project department, almost all of the more serious quality problems, which led to rework, repair, push back the phenomenon of repeated construction. These phenomena lead to an increase in the amount of ineffective work, increasing the input of labor, materials and equipment, and ultimately increasing the cost of expenditure.
6, construction equipment utilization rate is not high
Some projects undertaken by the Ministry of the project in mind, in order to ensure that the construction is uninterrupted, blindly purchasing or transferring a large number of equipment from other projects to standby, and even purchase some of the project does not require equipment, resulting in equipment out of service for a long time. Both take up valuable cash, so that the construction production of urgently needed people, money and materials can not be in place in a timely manner or increase the financial expenses, but also increased depreciation and equipment maintenance expenses, resulting in a sharp increase in the cost of the Ministry of the project.
7, construction arrangement is unreasonable
(1) can not reasonably configure the manpower, materials, equipment and other resources, resulting in waste of nested work;
(2) construction arrangement is unreasonable, can be completed in one step, the actual second and third time to complete, resulting in reworking;
(3) the construction order is reversed, increasing the number of ineffective manpower, materials and capital investment, resulting in a substantial increase in costs and so on.
8, more safety accidents
In the loss-making project department, most of the project department has occurred in different degrees of safety accidents.
Minor injuries affect the employees to work, increasing labor costs; serious injuries affect the employees to work, increasing labor costs, and the need to spend medical expenses, increasing overhead expenses.
Fatal accidents not only increase the huge amount of pension expenses, directly increase the cost of expenditure, but also may affect the mood of the staff, reduce productivity.
9, chaotic financial management
All the loss-making project department, its financial management is not chaotic phenomenon. Specifically embodied in:
(1) There is no complete financial management system
Some of the loss-making project department of all the income and expenditure by individual leaders and financial, planning, materials and other personnel to control, not by the system to determine the expenditure, rely on the supervision of constraints on the expenditure, which leads to all the expenditure without planning, engineering profit and loss of no one knows.
(2) funds management chaos
open more than one bank deposit account, but not in time to reconcile the cleanup, the bank receipt and payment vouchers are not timely accounted for, the white notes are not accounted for against the cash, the result is that the material can not be timely warehousing, personal arrears can not be cleaned up in a timely manner, the bank deposits and cash accounts do not match the huge cost of concealment of the bank deposits and cash balances, resulting in the project before the profit and loss or loss of the entire project. The project is in the red or the whole project is in the red.
(3) Inaccurate recognition of debts and liabilities and untimely settlement
Some project departments record the prepayment of goods and works in the creditor's side and the payable goods and works in the debtor's side for sales and subcontracting units, but due to the inaccurate bookkeeping or untimely or careless checking in settlement, they end up overpaying for the goods and works, which results in a loss. Some project departments do not clear the receivables in time, and then the receivables cannot be recovered due to non-payment, bankruptcy or exceeding the statute of limitations for recourse by the defaulting units, resulting in losses.
(4) Inaccurate calculation of income and cost
Some project departments don't know how to calculate the project settlement income, calculate the contract amount as valued income, and then calculate the profit and loss, forming a former profit and then a loss; take the appropriation as valued income, so that the project department's profit and loss of each period is not real, if the construction unit owes a larger amount of money, then the project department will form a false loss.
Some project departments do not know how to calculate the cost, the costs should be included in the cost of omission, such as depreciation of fixed assets should be mentioned not mentioned and employee welfare costs, should be turned over to the tax, pension insurance premiums, medical insurance premiums, unemployment insurance premiums, housing fund and higher management fees, has been used but not yet paid for the cost of materials, should be issued but not issued the wages of the employees, which leads to the cost is not real, the profit and loss is not allowed.
Some project departments do not carry forward the costs according to the regulations, and put the costs that should be borne by the later period into the cost in advance, or transfer the costs that should be borne by the current period to the later period, which affects the authenticity of the costs.
(5) Poor accounting groundwork
Auditing accounting vouchers is not serious and careful, the formalities of vouchers are not complete, the basis for reimbursement is not sufficient, and the registration of books is not timely. Accounting entries are used incorrectly, the recording of various accounting data is not true and accurate, losing the significance of bookkeeping and affecting cost calculation.