Introduction to TLP

The diverse nature of the activities of logistics companies poses many challenges. Resources need to be balanced to ensure good outcomes. Extensive investment in equipment items of various types must be managed to ensure a positive return is being realised on those assets. The various types of jobs, which can range from a simple cartage job to a multi-faceted contract involving the use of many items of equipment and other resources such as company staff, suppliers and inventory, must be managed to ensure deadlines are met and profit realised. And of course the logistics company may be responsible for client’s inventory and have a need to manage this, and also to ensure related storage and activity functions realise a positive return for the company.

The TLP Software suite has been designed with recognition of this diversity and a goal of presenting Logistics Companies with the ability to manage all aspects of their operations in one integrated system, while allowing the company to utilise specialised accounting applications for the things they are suitable for.

This document details how the system can be used to manage large multi-facetted transactions, this being done by use of the Contract Management module.

Introduction to Contract Management

The Contract Management module provides the facilities to enable larger transactions to be managed. These transactions could be large transport jobs; for example a job to shift multiple  loads of a product where you wish to keep track of the number of loads, weight carried etc and may need to invoice this as one job.

Alternatively a contract could involve transport as a component but also has inputs from other areas such as labour, supplier purchases and stock issues. This type of contract could be transport focussed such as a heavy haulage contract with pilot vehicles and work crews to ensure the road can be traversed.

The Contract Management system takes inputs from the areas mentioned above and also allows for equipment hire where this equipment is not managed through the transport module. This caters for the use of diggers, graders and so on which enables the user to manage complex contracts such as civil engineering, road maintenance, rural contract work and many other such areas of complexity.

This document describes how contracts are set up, the various transactions that can be processed and the outcomes that can be obtained.

Contract Structure

Contracts are defined at three levels, these being;

Some examples of how this structure could be applied are;

Palm Kernel Procurement and Distribution

Using the Contract Management structure you can summarise activities such as purchases and sales of the product. Budget quantities can be applied at the job level hence you can manage how you are progressing against your procurement commitment and likewise manage the individual supply agreements that relate to this.

Civil Engineering

This example illustrates a contract which involves managing an increased set of inputs being, as it is, more extensive than a large transport job. In this example we have a driveway to construct which will involve three activities which in turn will consist of a number of jobs.

Inputs will come from transport jobs, covering the delivery of base course materials and so on. It will also include equipment hire to record the use of specialised machinery, time sheet entry to record workers time and possibly some supplier purchases.

All transactions are recorded against Jobs and summarised at Activity and Contract level. This structure enables companies with complex requirements to manage these in a flexible yet highly functional manner.

Contract Jobs

The contract job is the core record of the Contract Management system. All transactions are recorded against a job which also records budget data.

The screen shot above shows a typical job record. The job is linked to a contract, activity and client. It also stores budgets for revenue and costs as well as production. The production budget is compared with actual production to give a view on how much progress has been made with this job.

Cost and revenue figures can be seen in the Job Totals window. By selecting the Cost Details tab at the top of the screen it is possible to drill down to see totals for the various cost types such as labour, equipment usage, stock issues and supplier purchases.

From the Job it is possible to drill down to transaction detail, in the example below related time sheets are displayed.

Cost Transactions

Contract Jobs are updated by various forms of costs which are described in this section. All transactions calculate a cost value and a revenue value. The revenue is the calculated sale value of that transaction. In a situation where no revenue value is required these figures will be identical.

Time Sheets

Time sheet entry is used to record time worked against the various contract jobs. Time can also be recorded against overheads (eg: holiday, administration etc) thereby enabling you to manage entries of complete time sheets at the one point.

Each line of the time sheet will have values calculated based upon the hourly cost and revenue recorded against that employee.

An external employee code can be recorded for each employee and this will be recorded against the time entry. The user can also enter an external payroll code against each time entry which allows TLP to export all required payroll data for calculation in the Payroll System. At time of writing TLP includes a csv export that is in a suitable format for the IMS Payroll.

Equipment Hire

The use of equipment for contract jobs is of two types, transport and non-transport. Both are catered for by TLP.

Non transport equipment includes any item that does not require management through the Transport Management module. Examples are diggers, graders, bailers etc.

An example is shown above. For this type of equipment hire the equipment item is selected and cost and selling rates taken from the equipment record. The hours of usage is entered along with a production figure.

If the equipment hire was a transport job it would be managed in the same way as all other transport jobs. The only difference is that a Contract Job code is recorded against the Transport Job (see below) and the Contract Job is updated when the Transport Job is invoiced.

Stock Issues

For various types of contracts stock, or inventory, owned by the company will be used. This may include items such as fertiliser, construction materials such as gravel or could be a distribution product such as palm kernel.

Stock usage can be recorded by use of a Stock Issues facility. An example of this is shown above. A stock issue line involves selection of an appropriate stock code from which the cost and sale price are obtained. These are used in conjunction with the quantity issued to calculate the correct values for the entry.

Suppliers Invoice        

Miscellaneous costs and purchases can be recorded against a Job by use of the Suppliers Invoice facility.

This facility is similar to many accounting invoice entry facilities in that it allows for multiple cost lines to be entered for any creditor invoice with these lines being recorded against a General Ledger code. It differs however in that it also allows the cost line to be recorded against a Job and calculates a revenue value based upon a standard margin recorded against the Supplier.

The creditor invoice details can be exported to the financial system through a csv file, thereby keeping the financial systems up to date.

Job Revenue Estimates

In order to assist with the invoicing process TLP offers the ability to work with percentage completion figures in order to calculate the value of work done to date which can then be compared with the Revenue value, this being the selling value of all transactions recorded against the individual job.

In the example above the first job (number 23) is 10% complete which is calculated against the budgeted revenue to indicate we could be claiming $650.00 for work to date. The actual selling value of the transactions recorded to date is only $350.00 so we must decide which amount we wish to claim.

Reporting

A number of reports are provided within the Contract Management module which are used at various stages for differing purposes. Some examples are shown in this section.

Contract Budget Report

This report is used at the start of a Contract in order to provide visibility of the budgets created and to ensure these are correct.

Contract Labour Analysis

This report is used to manage and check the recording of labour against jobs. It can also be used to view details of work carried out. This report, like many TLP reports, starts off by showing a summary level and then allows the user to drill down to view more detail.

Contract Status Report

This report is used to provide an overall view of a contract, providing the ability to drill down from a high level to transaction detail, an invaluable tool to help answer questions that are raised.

At the highest level you can view or print a one line summary for each contract. In the example above we can see that our Driveway contract is in profit at this stage.

We can obtain further detail by drilling down into the contract. This allows us to view a summary line for all Activities within the Contract.

And from this point we can drill down into the various activities and see the details of each cost type within each job.

Contract Final Estimates

The data captured and stored against a Contract enables TLP to provide final estimates of completion costs and profit. An example of this is shown below.

This example is showing a line for each Activity and the Contract overall. The Activity line is calculated by summing values from the jobs that make up that line.

When we drill down into an Activity we can see that the final estimates of cost are based upon the percentage completion figures entered which are applied to the actual cost to calculate the estimate. This is then compared with the revenue budget to calculate an estimated surplus.