About Linking Projects and Contracts

One of the most important steps in setting up a project is linking the project with the contract. This associates the cost side of the work with the revenue side.

Contracts and projects are linked together using phases and contract items.

  • Contract items are added to the contract using the PM Contracts form and allow you to breakdown the contract into line items. For example, if the contract is for a general contractor, the contract items will typically be the schedule of values. If the contract is for a heavy/highway contractor, then the contract items will typically be the state’s bid items.

  • Phases are set up on the project using the PM Project Phases form and each project phase must be associated with a contract item.

The simplest way to link a contract and a project is to make a contract for each project and then link all phases on the project to one contract item. You can also create a contract item for each phase and link multiple phases to single contract items as needed. For example, there are two phases associated with a single contract item in the diagram below.

Taking advantage of how contracts and projects relate allows you to develop a standard cost-coding scheme that you can use on every project, while dealing with each contract on the customer’s terms. The following are some of the ways these links are used by the software.

  • When you are ready to bill contract items in the Job Billing (JB) module, the system can provide an up-to-the-minute record of all costs that have been posted to the job phases linked to those contract item(s).

  • When you are preparing to pay subcontractors, the system can provide contract billed-to-date information helpful in determining the amount you want to pay the subcontractor.

  • You can develop Crystal reports that show job costs with the contract revenue to obtain a current status and full picture of profitability.