Project accounting measures the financial aspects of project performance. Once the budget is agreed, costs need to be tracked and performance measured from day one, if the anticipated profit is to be achieved.
For all but the simplest project, this requires project planning and estimating at task level, so that realistic estimates can be worked up into an achievable budget. Innate's resource management software provides core project costing capability.
Project costs typically relate to:
Forecasting remaining costs should be based on the value of the work done. This requires an objective assessment that should be independent of the actual effort expended. Individual resources doing the work can be asked to estimate their remaining work when filling their timesheet.
Variances can then easily be calculated to show the degree of under or over performance to date. Where the variance is significant, the forecast of outstanding effort should be re-assessed, so that the likely impact on project profit can be seen. This needs to happen early on if corrective action is to be effective.
Performance charts, such as that shown below, are useful for communicating the implications of performance.
The responsibility for project accounting can span operations, such as project management, and finance. Project Accounting modules are often part of the corporate finance system, but where project managers have profit responsibility, they need their own operational tools, which feed into Finance.
Innate's resource management software fits the bill for operational project accounting. Alongside the project and resource management functions needed to plan and staff each project, we provide:
Data exchange between the Innate resource management software and finance’s accounting system is easily managed. Our experience includes MS Dynamics GP, NAV, SAP and Sage products. Staging tables that permit finance to review data before acceptance are popular, but direct transfer between databases can also be provided.
Project Accounting measures the financial performance of your projects. Innate resource management software provides effective project accounting.