Project-based businesses are theoretically interesting places to work. There’s very little of the “same old, same old” routine you can get in a company that does the same thing very day. Each project is a little different. That’s fun, right? Whether project management is exciting or stressful depends on an employee’s personality. Technology is also a factor, however.
One constant source of stress in project-based businesses arises from the need to keep track of the money. Project accounting tends to be a headache. In even the best-run companies, you might find all sorts of manual handoffs between accounting systems, spreadsheet-based expense tracking and the like.
While such adaptive processes may work, they are invariably inefficient. People spend billable time chasing down project accounting details. Billing slips out of alignment with project status, and on and on. Ultimately, although it may seem as if everything is fine, manual patchworks for project management and accounting lead to project delivery problems.
Today, modern ERP software offers a solution, with built-in project accounting functionality. Here are some examples of how ERP project accounting software helps you save time and improve project results:
- Set up new projects using templates—modern ERP lets you templatize project quotes, contracts and budgets. You can then segue directly to tasks, dashboards and analytics without having to re-key project information into a new system.
- Visualize project statuses in real time on management dashboards—improve on-time delivery and spot potential problems before they cause trouble.
- Establish a “single version of the truth”—capture project time sheets, expenses, milestone statuses and any other relevant issues in a single locus of control. Modern ERP makes this information available to tablets and mobile devices, so everyone can stay in tune with the project even if they’re out of the office.
- Track project costs—ERP project management tools give you the ability to assign cost codes to project items, so you can know how much is being spent on different categories of project work. This is quite useful for companies managing multiple projects at more than one client site. You can see the activities going on in the field in real time and be aware of any irregularities or budget overruns.
- Stay on top of change orders—clients often change project parameters. This can cause disruption and accidental financial losses as budgets may not accurately reflect the new scope of work. Alternatively, a change order may produce an updated but inaccurate budget for client approval. For example, if a change order requires 100 more billable hours, but a revised budget only captures 50 hours of expected new billing, that will result in a loss. As experienced project managers know, it is easy to miss an error like this in a fast-paced, multi-project business. ERP, with its unified point of management and data, makes it much simpler to track changes and keep up with their financial implications.
- Recognize revenue in accordance with accounting rules—the tax authorities expect your business to recognize project revenue based on ASC Rule 606. This means that you cannot recognize revenue either before or after the correct time period. ERP with project management will make this revenue recognition practice a natural part of the project accounting process.
These are a few of the many benefits of modern ERP solutions for project management and accounting. Learn how Acumatica can help you achieve these benefits below.
Acumatica Project Accounting
Acumatica has designed and developed a project accounting solution for the unique needs of the professional services firm or project-based business. This platform helps leaders to make smarter decisions, simplifying everything about the business—budgeting, inventory, time sheets, billing, profitability, and reporting for individual business initiatives.Learn more in our webinar Project Accounting Made Simple, or contact us for a demo.