Many companies invest resources to complete internal projects. These projects include software implementation, merging computer systems and building new facilities. These companies often assign project managers, project accountants and other employees to work on completing the project. These employees may work solely on the project or may add project responsibilities to their regular job. The project manager creates a work plan for the team and monitors the progress of each employee. The project accountant manages the financial details of the project.
Many companies implement a specific process for managing projects. The process of project management involves initiating the project, planning the steps of the project, executing each step, monitoring the progress and closing the project when all tasks are completed. Some companies use specific software, such as Microsoft Project or Wrike. These software programs allow the project manager to enter specific tasks, a time line for completing those tasks and the ability to indicate progress on each task.
Purpose Of Project Accounting
Every project initiated by an organization entails financial resources to complete. Project accounting allows the company to estimate, or budget, the total cost of the project and to track the costs as they occur. At the end of the project, the company can evaluate the financial cost of the project to determine how well the project team stayed within budget and to identify any issues that caused the actual project costs to exceed the budget.
Role Of Project Accountant
The project accountant works with the financial aspect of the project. She meets with the project manager to learn each task necessary to complete the project and which employee maintains responsibility for those tasks. She spends time with each employee to outline the financial requirements to complete those tasks. She helps the employee evaluate alternative actions based on the financial impact of each. After determining the total financial requirements of the project, she creates a project budget. Throughout the duration of the project, she monitors each cost incurred. Periodically and at the conclusion of the project, she creates a progress report that communicates the budgeted project cost, the actual project cost and the difference.
Pros And Cons
Including a project accountant on the project team brings both pros and cons to the company. On the pro side, the project benefits from having a team member dedicated to the finances of the project. Many employees and managers focus on completing their tasks. The project accountant keeps his attention on the cost as well. On the con side, smaller companies struggle with the cost of dedicating an additional employee to the project team.