PROJECT ACCOUNTING SOFTWARE:
A PRECURSIVE GUIDE
WHAT IS PROJECT ACCOUNTING?
Project accounting is the mechanism used to track the financial performance of a project. Project accounting will typically focus on key financial elements that make up a project including costs, billing, margin and revenue. Project Managers will typically be given responsibility for ensuring that projects are delivered on time and to a certain budget. The progress of an individual project and then the overall portfolio of projects is usually monitored by the finance and operations teams.
Project accounting for SaaS companies forms a critical part of their business running smoothly as well as for professional services organizations, and delivery teams because it will influence the overall financial performance of the business. The best run PMOs are reporting on the financial health of projects in real-time because the forecast of performance as well as the tracking of variance will measure the profitability of the portfolio of work. Accurate information on project accounting will inform investment decisions such as hiring or technology to support project delivery. Project Accounting covers the following items for your projects; Budgets, Cost estimates: labor and non-labor costings, Expenses, Bill and Invoicing , Project Financials, e.g. Project Margins, Revenue Recognition.
KEY BENEFITS FROM PROJECT ACCOUNTING
Some of the key benefits of project accounting effectively include the following:
BETTER DECISION MAKING
Assess the performance of a project in real-time and adjust accordingly, internally and with the customer. Decisions on staffing should take into account the costs of resources vs. the budget.
Improving the performance of delivery over time leads to improved margins and profits that can be reinvested into your business.
IMPROVED CUSTOMER RELATIONSHIPS
By tracking budgets and revenues across every stage of a project allows project managers to better manage customer expectations. Build a reputation for quality of delivery and billing accuracy.
Seamless transitions between sales, services and project delivery teams aligned on budgets and all key KPIs.
THE ANATOMY OF GOOD PROJECT ACCOUNTING PROCESS FLOW
In order to achieve the best project accounting process flow, the following factors should be considered:
Initiation - The PMO or project manager should collaborate with the sales team to understand what has been sold if they were not involved in the pre-sales phase.
Planning and Budgeting - The best companies use project templates to reduce the admin burden during planning and budgeting. They have used analytics to understand the performance of previous projects to inform the way future work should be planned and budgeted to maximize margins.
Execution - Best-in-class project execution will feature accurate project accounting and a proactive management of any issues or delays that would lead to rising costs and declining margins.
Monitoring - The importance of real-time data on project performance is critical to maintain the overall success and health of a project portfolio. Complex project work requires your organization to track timesheets and expenses for your team as well as potentially non-labour items that are relevant to delivery.
Change Requests - Project accounting software shows you where projects are slipping and can help you predict where you may need to make a change request. This will help you better manage the communications of these requests with clients as well as figuring out what factors are causing things to over-run.
Closure - Project closure will be directly linked to whether value has been delivered to the customer. With advanced project accounting capabilities, the best companies can reduce time-to-value because they have a much better handle on budgets and timelines across their entire portfolio of work.
DISCOVER PROJECT ACCOUNTING SOFTWARE, FROM PRECURSIVE
Discover the power of Precursive for your project accounting software needs. Precursive is 100% native to the Salesforce platform meaning that sales, project, operations and finance teams can see the overall picture of the health of your project portfolio. Having access to project accounting software will guarantee that your team stays a step ahead of any budget issues and avoids a situation where you have to go to the customer and explain that you have burned through the budget too quickly.
AUTOMATION IN SALESFORCE
Precursive PSA can automate the creation of projects and budgets from Salesforce Opportunities and map over the relevant costs from products in the opportunity or the quote in Salesforce CPQ.
Precursive PSA will help you forecast the margin of your projects from pre-sales through the key phases of initiation and all the way through to completion.
Accurate billing and invoicing is key to maintaining a good relationship with customers. The manual effort required by your finance team at the end of the month can be avoided with Precursive’s flexible billing engine.
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