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Stay on Budget With Project Accounting

Stay on Budget With Project Accounting

UPDATEDAug 29, 2023

If you’ve worked in project management for any period of time, you understand how crucial it is for professional services teams to stay on budget. This isn’t just about execution, it also involves rigorous planning. Setting realistic project budgets requires you to level-set with clients, thoroughly going over expectations and needs to ensure that what your business is promising aligns with what you can deliver. 

But if you’re working solely in spreadsheets, it’s difficult to process how much cost you’re incurring against planned spend and determine whether you’re staying on track against margin goals or not. Project accounting requires robust financial management solutions. Keep reading to see how to stay on budget with project accounting software.

Granular Control Maximizes Project Profitability

When you’re working in a spreadsheet, you can’t see the full context of decisions that need to be made, and you can’t track key performance indicators (KPIs) in real-time, making it difficult to be proactive in mitigating risks that jeopardize project margins and client satisfaction. Accurate project accounting depends on being able to track even the smallest pieces of data and how any changes in business processes affect company finances. Use all this information to create actionable steps and tasks in your project management software to stay on budget.

Use Forecasting Tools to Predict Budget Needs

It is important to ensure you are not asking teams to deliver against project budgets that were never realistic or achievable to begin with. To forecast the proper budget for a project, you need to understand the timeline of the project in detail, as well as the specific resource requirements at all the points along that timeline. This helps you know how long you need certain types of internal or external team members, which enables you to build an accurate budget that accounts for costs you expect to incur and the revenue you expect to generate. Allow some room for error when it comes to resources and costs – no project goes precisely according to plan – but use data from similar projects you’ve run in the past to predict where you think issues might occur. Prepare solutions that will be able to counter these risks before they happen, in case they do emerge. Any significant oversights in the budget can negatively impact your project performance, so you want to avoid them as much as possible.

Prevent Project Accounting Errors Before They Happen

No one is happy when project accounting errors happen. When your clients are exposed to them, these errors erode their trust in you as a provider – no client likes receiving an inaccurate invoice asking them to pay for work that wasn’t done. And they significantly increase the likelihood that you will not be able to bill for the work that you’re doing, eroding margins and impacting the profitability of your business.

That’s why you need to utilize comprehensive dashboards that show you errors, and inform you where you are experiencing revenue leakage. Do weekly check-ins (at least) with your project to ensure no issues have arisen. Use intelligent insights to prioritize certain actions with your team. 

Plus, all the accounting project data can give you a clear picture of your revenue, so you’re not scrambling to handle everything at the end of the month. When your revenue is outlined in one place, you can automatically reforecast as revenue is recognized, and catch errors as they are occuring.

Clear Time and Expense Submissions

It’s crucial for each resource to easily submit time whenever they complete work on a project so that that time  can accurately be reflected in project actuals. The same is true for expenses – it not only needs to be easy for resources to submit expense claims, but the process of approving expense items and for determining who will be covering the costs of those expenses – your business or the client – needs to be seamless and painless. That’s why the Kantata Professional Services Cloud offers streamlined time and expense entry. Because so many offices are remote, we make it easy for users to submit their time and expenses no matter their location.

Download the mobile app to submit time on the go and create expense claims from anywhere, including your favorite coffee shop. If you’re a manager, create parameters based on the time allotted for a task, so that employees can’t charge over the limit. If employees need to charge over, you can take a look at the work they’re doing and assess if you need to allocate more budget to that portion of the project.

Even if you are primarily focused on value billing, it’s critical to know how many hours an employee spends on a project. Understanding where your team spent the most time eliminates scope creep before it gets out of hand.

Project Accounting Made Simple with the Kantata Professional Services Cloud

Kantata’s financial management tools increase the accuracy of your project budgets and put you in a position to maximize profitability. Get in touch with us so we can show you how to improve your project budgeting with in-the-moment financial insights.

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