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Beginner Tips for Project Management Accounting

Updated: Jun 3



Effective project management should go beyond just task completion, deadlines, and

deliverables. Regardless of your type of business or company, every project involves a budget that the team requires to be successful. As such, project management needs accounting to run smoothly as well.


In a previous post on how "Project Management DO NOT BRING Tangible Benefits", we highlighted how good project management could help improve customer experience and retention. As such, they can help increase your business revenue. At the same time, project management can also facilitate efficient risk management, which can help mitigate risk exposure and lead to cost savings by increasing your final project budget baseline.


As you can see, investing in project management accounting can help you stay on top of the

finances involved in your business' projects. Fortunately, many modern project management

software solutions available today offer accounting capabilities. According to data from Grand View Research, the global project management software market size was valued at $6.59 billion in 2022 and is expected to grow at a compound annual growth rate of 15.7% from 2023 to 2030. Thanks to the many features offered by these programs, teams, and supervisors can easily track the performance of team members throughout a project to determine if the output still aligns with the set budget.


Below, we'll be sharing more tips for establishing an efficient project management accounting workflow for your business:


Track everything in real-time

A key element of good project management accounting is being able to track the time and costs involved in the project in real time. As per Softrax's guide on account hierarchy, getting your account hierarchies in order can help keep your project finances in order by ensuring financial data remains organized in a logical and consistent manner. Setting up an account hierarchy also lets you stay up to date with member access controls, which can help provide a better understanding of the team's productivity and workflow.


Account hierarchies are also crucial for financial reporting and budgeting, which can help make it easier for stakeholders to understand your business' financial health and performance. As such, having an easily accessible and understandable account hierarchy as part of your project management accounting can help draw a clearer picture of how well a project or the overall business is doing.


Set project scope and deliverables

Setting clear goals for your project before you even begin helps set the scope and expectations for team members. Scope creep is one of the biggest reasons projects tend to fail or even go over the budget, costing your business unnecessary expenses in the long run. By setting clear goals and expectations, you can prevent clients from asking for more edits or extras than originally planned.


Based on tips from the Forbes Technology Council, defining a clear scope up front with a metric such as "return on data investment" can help prevent scope creep. If you're doing project management accounting, you're also likely to spot signs of scope creep as long as you stay on top of the costs and expenses involved in a project.


Stay involved with every stage of the project

Finally, it's important to be involved in every stage of your project. This includes attending meetings, daily check-ins, and monitoring progress and spending when doing some much-needed project management accounting. As previously mentioned, doing this can help you manage potential risks that can disrupt your project or result in unwanted additional costs. By staying on top of your project's budget, you're also more effectively managing the project as you can align present tasks with expectations.


Staying involved in the project details, of course, shouldn't be mistaken with micromanaging.

While it's important to monitor progress and spending, your main goal should be determining whether or not existing tasks and deliverables are doable in the cost and time constraints you've set within the project scope.


Article written by Reanne Josette


Exclusively for Project-Assistant.com



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