Every task you perform in your project has a cost. The longer you work, the more wages that you will have to pay. The same applies to expanding your scope and manpower. How can you tell if your budget is on the verge of being exceeded, or if it’s still within your reach? Use accounting software tools.
Project accounting software allows you to track the costs of your projects as they occur. This is in contrast to a financial accounting software, which allows you to see profits and losses at the end a given financial period. Project accounting software provides real-time information that allows you to make informed decisions and evaluate the progress of your project.
Continue reading: Project Accounting Software Comparison
6 Reasons You Need Project Accounting Software
1. Allocation of Resources
Most people have limited budgets and resources. This highlights the importance of intelligent allocation. Do you plan to invest in tools that will speed up your production process? Or would it be better to hire a senior member who can optimize the entire production pipeline? Are you willing to outsource additional staffing for the next project deliverables? Or would you prefer to negotiate for more time?
This can be done by using a project accounting tool. You can use data to determine which course of action will maximize your resources.
2. Sound Decision Making
Project management is a complex process that involves problem solving and decision making. This includes risk assessment and evaluating the costs and benefits. For example, adding manpower to your team if you are behind schedule will incur additional costs.
However, keeping your current team size could force them to work overtime or crunch to meet your time commitments to your client. Are overtime and night differential wages more expensive than regular team members? Although some decisions may not involve financial elements, it is clear that most will still result in a certain cost. These issues can be addressed with project management accounting software, which will allow you to make informed decisions based on hard facts.
3. Change Management
As production progresses, you will undoubtedly encounter new information. Once you have this information, you will need to decide if it is worth adapting for or if it is just a distraction from your current objectives. Project accounting software can help evaluate the impact that a proposed change could have on your workflow and costs. These pieces of information can be used to support your call to the parties to whom you report.
While stakeholders might try to push you to consider the change, at the end it will be your responsibility help everyone align and decide which changes are worth implementing, which ones require further investigation, and which ones to ignore.
Continue reading: Change Management is essential for project success
4. Invoicing and payments
Invoicing and tracking payments is a taxing but essential job. Project managers must pay attention to many things, including team progress, client updates, project progress, team morale and deliverable audits. It can be overwhelming to add invoicing (and sometimes payment chasing) into the mix. This can be automated with the best project accounting software. This allows you to focus on the important things at the moment and can trust that the administrative side of your project operations will not fall through the cracks.
5. Coordination with clients and reporting
It is a great way to keep a good relationship with your stakeholders by sending them regular, detailed updates. This lets them know that you are making progress and that you have used the resources they have provided. This involves gathering all data, organizing it and making it easy to understand. This can be tedious, especially in busy times. T
Accounting Software can improve business productivity