Mastering project accounting to perfection makes your company work faster, more accurately, efficiently and effectively.
Because the tighter the control over planning, processes and budgets, the easier it is to meet deadlines and targets.
Accomplishing this is no mean feat. It’s no surprise then that companies from all sorts of industries continuously invest a lot of time, money and energy in the optimization of their project accounting.
So what does it take? A solid organization, transparent processes and smart digital tools which interact and reinforce each other.
This is why project accounting is so important
Whether you call it project administration, project management or project accounting, it all boils down to the same thing: achieving your goals, ticking off KPI’s and delivering quality. Within the set time frame. Within budget.
With detailed project accounting, you will be able to get a profound insight into the finances of your projects. As a result, you know exactly what you need and you can manage them more proactively and effectively.
In a nutshell, it is all about skilful planning, control and accountability of:
- project costs and expenses;
- invoicing in response to project activities;
- time and money spent on deliverables;
- reporting and analysis;
- assets used and necessary for the project.
Having your project accounting in order offers many operational advantages. And financial teams benefit too:
- You can closely monitor the progress of individual projects from a financial standpoint;
- You avoid mixing up projects and always have an overview;
- You can make timely adjustments, for example to the number of hours spent on a project or the project budget.
Ultimately, project accounting is a strategic tool. Because it provides insight into the progress and potential of each project initiative. It directs resources to where they are most needed and helps to quickly identify bottlenecks and opportunities.
The key success factor? Control. Over the costs of a project. Over the time spent and over the tasks of the participants.
In-depth knowledge of project accounting and which tools are most appropriate for your organization will help you to gain control.
Proven success in a wide range of industries
Project accounting has already proven its worth within all sorts of industries. Especially in organizations with multiple ongoing projects, with ever-hanging teams and/or are spread over different locations.
Whether commercial, civil or industrial: construction projects require meticulous project accounting as they can take place in multiple locations and require coordination by multiple teams.
For logistics companies, the success of their projects depends on their level of control over multiple mobile units. They work with hubs and mobile workers. In addition, managers must continuously anticipate changes and be able to provide necessary resources quickly.
The transportation industry relies on transportation hubs and mobile teams. Teams move vehicles between the hubs. Although the challenges are similar to the logistics sector, transport projects are often even more complex.
Film and TV productions require meticulous organization. Often, projects require large teams and can take place both in the studio and on location. Costs are diverse and difficult to predict, such as equipment hire, transport and accommodation.
Cost management for project accounting
Of course, you want to complete projects within the set deadlines, but cost control is also important. Budgets should not be exceeded. Ideally, you should stay well below the limits.
And that is only possible if you have full financial control, as projects often require substantial investments and employees may need advances to be able to do their work. There are various ways of providing them with money.
You can simply give employees cash to settle project costs. Sounds like the easiest solution, but in practice, it turns out to be rather outdated and inefficient.
After all, there are risks involved in working with cash. The risk of loss or theft is considerable and cash administration is a lot of hassle. You have to keep precise records of every transaction in ledgers.
Large organizations, in particular, should therefore question whether still using cash is expedient. For instance, it requires a lot of time to manage cash provisions across different branches. In addition, over time it becomes increasingly difficult to keep track of who spent which amount on what cost item.
Personal bank cards
Bank cards are a good alternative to cash. They are much easier to carry than cash and employees can also use them for online purchases. And lost or stolen cards can be blocked quickly.
However, due to the strict requirements of banks, it can be a bit cumbersome to organize bank cards for individual employees. Whether for small, medium or large companies. Even directors and top managers often have to wait for documentation and approval processes to be completed.
In many cases, companies do not manage to arrange enough payment cards for all critical people in a project. Even if they do, a lot of time and energy is wasted on the applications. And then the project has yet to begin!
Cash advances to employees
Employee advances are loans that organizations provide to employees to cover expected business expenses. It is then up to the employees to show what actual expenses they have incurred
They are given quite a bit of money upfront but may end up not using it all. That is why they have to keep precise records of how much money they spend and on what. They also have to pay back the money left over. Usually within a year.
This system not only creates unnecessary liability for employees but is also a burden on finance teams.
They have to make a lot of cash available for these advances, which reduces the free cash flow of the company.
And the additional administrative tasks associated with managing payouts and refunds add another burden to finance staff.
Business prepaid debit cards
Prepaid bank cards offer a much simpler and better solution for managing project costs. They offer flexibility for online and offline payments.
In addition, finance managers have optimal control over these cards. They can easily set budget limits and, if necessary, add extra credit in just a few clicks.
The use of prepaid cards means the company relies less on cash. This improves the safety of employees and reduces the risk of fraud.
With SimpledCard, companies issue bank-independent Maestro and Mastercard prepaid cards to employees. The cards are registered to a specific employee, but can easily be re-assigned to a new cardholder.
The SimpledCard app tracks real-time transactions made with the cards. In addition, finance managers have the option to easily enable or disable cash withdrawals from ATMs via the online platform.
Justifying expenses has never been easier for employees: within seconds, they upload an image of the receipt and record the expense.
What project administration tools are there?
There are many tools that enable project managers to be more productive by streamlining processes. These can be used at three levels: company-wide, project-based and operational.
Accounting software & ERP’s
By combining accounting data from different projects and departments, this type of software offers control over an organization’s costs, resources and processes. It provides secure and more complete input for decision making, which is indispensable for senior management.
Task management software
With this type of software you can improve your team- and project management. The main focus? Organizing and prioritizing the tasks that make up each project. For middle management, this software provides a framework and organizational structure within which projects can be completed effectively.
Expense management software
This type of software enables organizations to easily track and control the expenses of employees, teams, projects and departments. While certain systems focus primarily on reimbursements, a number of platforms also include payment options.
Contact us about your project administration
Are you wondering about how you can easily implement SimpledCard within your organization so that your employees can organize their expense justifications more quickly and your finance team can get a grip on project management?
Our financial experts are happy to discuss with you which solutions best suit your organization, wishes and ambitions.