For many businesses, the execution of projects demands procedures for project control and record keeping both for the project managers and all other members of the project. This simply means tracking of all the financial components of a project such as budgets, estimates, costs, bookings, billing, schedules, etc.
When it comes to project management and control, it is not enough to consider just the past records of costs and revenues incurred in a specific project. The best-in-class project managers always focus on the future – future costs, future revenues, and even future problems.
This is the main reason why traditional financial accounting schemes cannot keep up as it fails to reflect the fast and ever changing nature of a project. In many cases, accounts focus on recording routine costs and past expenditures that are attached to activities.
Past expenditures are costs that have been incurred and therefore, not much can be done about it for the future. It may or may not even be relevant for the future so in a very common scenario where after completion of an activity the project manager discovers suboptimal quality making the entire work useless, the resources expended on that mistake cannot anymore be recovered for redoing. (This of course doesn´t mean that there will not be any attempts to shift the burden of payment).
The fact remains that financial accounts have a historical approach by nature. It is important to have the means of forecasting the future course of a project in order to attain better project control.
Project Accounting Solution
From an organizational standpoint, having a project accounting solution carries a lot more benefits in comparison to the lone disadvantage of the added cost. Having a project accounting solution means better tracking of budgets and revenues in all stages of a specific project. Project managers therefore have access to project hours, expenses, invoices, and accomplishments among other things.
Having said that, it becomes easier as well for project managers to forecast for activity cost control as Project Accounting solutions like Epicor Financial Planner have advanced forecasting capabilities.
More than just forecasting for activity cost control, Epicor Financial Planner offers internal reporting to project managers for day to day planning, monitoring, and control. It also does internal reporting to managers for aiding in formulation of strategies as well as for external reporting to different stakeholders.
Epicor Financial Planner records all expense transactions in a general ledger which subsequently forms the basis for management reports on particular projects and the financial accounts for the entire organization. EFP also offers accounts payable and accounts receivable journal automation, job cost ledgers, and inventory.
To see a demo of this solution, email email@example.com or visit www.dsp.se.