Improve Your Project Financials: Get a Project Accountant

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Does your organization want to eliminate scope creep? Do you want to improve your billing processes and avoid collections problems? And wouldn’t getting paid for extra services be nice?
Of course, it would.
How do  you go about it? Get a project accountant.
Just what is a project accountant? This person is one who is assigned to specific project accounts and remains with them from beginning to end.  The project accountant monitors the financial progress of a project instead of the overall progress of a project. They also generate financial reports that track the projects. And having one can decrease the number of collection days in your company. The project accountant is literally the project manager’s right-hand person, and staying with the project manager throughout a project’s life cycle. They also perform a number of tasks such as:

  • making sure any contracts are completely executed
  • setting up contracts in the project tracking and accounting software
  • monitoring budgets versus actuals
  • sending accurate invoices
  • establishing a good working relationship with the client’s project accountant for payments
  • authorizing access to project accounts
  • investigating all project expenses not billed to customers
  • authorizing transfers of expenses into and out of project accounts
  • reporting a project’s profitability to management
  • approving write-offs of project-related billings
  • closing out project accounts when a project ends
  • compiling project financials for internal and external audits

Having a project accountant as part of your team is ideal if you want to improve your cash flow. Because projects very often cross organizational boundaries and last variable amounts of time–days to weeks to years–your budgets can also be changed multiple times. As a result, it’s important that project managers can receive accurate assessments and monitoring of project budgets. This ensures that the project is on budget.
We all know that revenues and costs appointed to projects can be divided further into a work breakdown structure (WBS). If you use a project accountant, you get the flexibility to report at any such level and compare the historical with current budgets.
In managing projects, we know that our revenues and costs are appointed to projects that in turn can be divided into the work breakdown structure (WBS). When you use a project accountant, you can report at any level and compare current budgets with historical ones.

Having the project accountant also enables you to precisely measure your ROI for individual projects. You can then calculate funding advances and actual budget measured against cost variances.
The project accountant helps you to precisely measure the ROI of your individual projects and enables true performance measurement. As your costs, revenue, activities, and labors are accurately tracked and measured, the project accountant helps provide future benefits to your company. Any future estimates and quotes can be adjusted based on the past project performances. Using a project accountant can also have an impact on any investment decisions your company might make.
Do you use a project accountant? If so, have you noticed improvements in areas such as scope creep, ROI, and better collections results? How significant were the changes and improvements?
If you don’t have a project accountant, then why not? Do you expect to bring one in soon?

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