Business Innovation And Skills Of Uk Government

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According to the data of the Department for Business Innovation and Skills of UK government, there are 5.4 million small and medium enterprises (SMEs) in 2015. Based on the official EU definition, if the staff headcount of the enterprise is less than 250 and the turnover is less than or equal to 50 million euro, which will be classified as medium sized enterprise. And for small and micro enterprises, their headcount should not be more than 50 and 10, the turnover has to be under 10 million euro and 2 million euro. Most of the SMEs contribute in the Construction section and there is a number of 956,000 SMEs estimated by the government. Furthermore, the industry of Professional, Scientific and Technical Activities (792,000), Wholesale and…show more content…
The Department for Business Innovation & Skills defining construction section as three sectors, they are contracting, services and products. Construction of building (e.g. commercial, residential), civil engineering (e.g. roads, tunnels, bridges and utilities) and special construction activities (e.g. electrical and plumbing installation, demolition and site preparation, plastering, painting, roofing etc.) are classified as contracting part. For the construction service sector, firms usually take part in wholesale, renting and leasing of construction equipment and providing architectural and quantity survey services. Lastly, manufacture of construction products and materials such as bricks, tiles metal structures, doors and windows of metal, electric lighting equipment etc. are representing the product part of construction industry.

The accounting method used in construction business usually depends on the length and size of contracts. The length and size of the construction contracts can be varied so it is hard for firms to match the expenses to their different sources of revenue. As the nature of transaction of construction business is special, which the most suitable accounting tool is job costing. Job costing method required the accumulation of the costs of materials, labor and overhead for the construction contract. This accounting tool able to track any individual costs in specific
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