MEP is a cipher which stands for mechanical, electrical, and plumbing works within the construction arena. These disciplines are addressed together due to their interactions in the equipment field. Dubai has big player companies in the MEP world which adds a huge to the economy of the country. Top-notch teams of professionals from each discipline work together for the development of this sector. MEP companies are cash-driven in nature, frequent cash influx is a necessary part of its functioning. Project management is a crucial part of this sector. Scheduling of work plans, assigning jobs, evaluating the efficiency of operations are all the major activities held in project management. As Mechanical, Electrical, and Plumbing (MEP) contracting is a part of construction works it exponentially grows with the growth of the construction industry globally. Accounting services are vital for MEP companies like any other industry. Specialised software is required to maintain seamless workflow among the activities with high operating efficiency and increased profitability. MEP activities require critical planning and smart decisions imbibed with confidence to enhance growth and financial stability. MEP Management is an industry-specific activity which covers business activities starting from the contract creation to the completion.
MEP companies can choose any of the following accounting methods, the various costs associated are customary accounts that are prepared based on the following costs.
Direct costs: The actual costs associated with projects which include:
Indirect costs: Costs which cannot be associated with the projects (shared costs)
Overhead costs: Costs which are related to administration and general expenses
Here are the most common accounting methods MEP companies follow:
Cash basis: The basic form of accounting used in MEP companies as it provides the least view of financial health. In the cash basis method, income is recorded on the date that the payment is received in your bank account. The cost of goods sold and overhead costs are recorded when payment is made.
Accrual basis: In the accrual accounting method, the income and expenses are recorded when the customer is charged. This method provides a better view of financial health.
Percentage of completion method: The most common accounting method used by the contractors and other construction businesses, under the percentage of completion method. The regular basis of recording of income and expenses are done. Revenue is recognised on the portion of the work completed. It depicts an accurate view of profit earned.
Completed contract method: Income and expenses are recognized when a contract is completed in full.
MEP companies function based on the project management systems, therefore it requires a frequent influx of cash for the operations. Therefore, a good accounting system for MEP companies helps in tracking:
CDA offers quality accounting services for MEP companies in Dubai and UAE. We have qualified & dedicated professionals with an innovative and commercial approach to meet today's highly challenging business environment and we follow the highest level of professional ethics and quality in our services.
Accounting and bookkeeping services include:
Our experts participate in the formation and implementation of company financial plans with the following activities:
CDA experts help in the planning and preparation of methodologies that are concentrated on the efficient utilization of an entity’s resources, which aid the manager in augmenting the shareholder and company value. Our internal audit services focus on:
The external audit is organised to see the precision of the statements and the financial position of the company. We check the compliance of accounts with International Financial Reporting Standards (IFRS), according to the Financial Accounting Foundation along with the Preparation of comprehensive and impartial reports on corporate ethics for management executives
We Perform Tax Audit at regular intervals to make sure that the Tax is properly recorded as per the FTA requirements and Monitor and review of Executive Vat Summary complied with FTA rules and regulations with VAT filings.
Our CDA team is well experienced in MEP companies with a wide range of clients. We follow the highest level of professional ethics and quality in our services. Our client portfolio is evidence of our excellent accounting services for MEP companies.
“CDA Accounting is the perfect find for all of our Auditing as well as the CFO requirements. Charles and his team have placed customer satisfaction at the top of their agenda, backing it with all of the knowledge one could ever need for running the business efficiently. Any inquiry or concern is dealt in a swift manner; with their support offered as being second to none. As an MEP and Contracting firm that has been in the industry for over 40 years, words would not be enough to recommend CDA Accounting as the perfect support for all your company's Accounting or Bookkeeping needs in an extremely approachable and professional manner.”
Managing Director, Al Andalous Electromechanical Works LLC
We prefer BuilderTREND, Sage 300 CRE due to its robustness in providing: Job Costing Reports, Work-In-Progress Reports and hundreds of other combined reports. Depending on customers preferences and needs we work with other systems too.
Yes, as a business you can choose to have an in-house system for accounting, we are open to working with any accounting system as the basics of accounts are the same for all the systems.
Contra-accounts which are off settled to sales include (1) commissions paid, (2) contract allowances: incentives to get the customer to finish the deal, (3) closing costs of goods.
Work-in-progress will be shown on the asset side of the Balance sheet. The Value of the work-in-progress will be inclusive of Profit. WIP includes (1) materials, labour taxes and benefits, (2) supplies equipment rental custom tools for the respective project, (3) engineering/outside consulting, (4) subcontractors, (5) project licenses & permits, (6) capitalization costs.
Cost Plus Contracts: The contracts in which the contract value is added with a certain percentage of profit under the inability to measure the exact costs.
Yes, our team is well experienced and aware of IFRS 15.
Yes, we do provide closing of books of accounts services to our clients monthly or quarterly along with CFO services.
For start-ups, we always recommend outsourcing your accounting work and once the business is established, you can opt for in-house which is cost-effective and professional in nature.
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