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Project Accounting: Why is it Important for Professional Service Firms?

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    People talk about how Project Accounting is essential for Professional Service firms so that they may have a better pulse on their projects and be able to see which projects are actually profitable.  But Project Accounting does much more than just that;  so what does Project Accounting really mean?

    Project Accounting enables you to monitor the progress of your projects from a financial position separately rather than mixing Project Accounting in with other standard organizational accounting elements such as geographical or functional departments, divisions, and for the enterprise. Project Accounting helps ensure that your projects remain on budget and that you are able to react quickly to any project overruns.  By managing projects by phases in a work breakdown structure (WBS) you can accurately measure individual projects allowing you to create more accurate estimates for future projects based on historical data.

    Don’t feel that you would be limited if you wanted to track projects with multiple phases occurring throughout different departments, because the idea of an organizational breakdown structure is that everyone in your organization can view the status of their projects or tasks based on their security levels. Empower everyone in your organization to follow their projects and tasks more closely.  By having many eyes reviewing progress you have a better chance to stay on-track.

    Another difference between traditional accounting and Project Accounting is that traditional accounting typically tracks costs over a defined period of time whereas projects can span over years. With Project Accounting you are able to monitor projects from start to finish and not have to close and re-open a new project after every accounting period.

    Project Accounting also eases and helps you to better manage revenue recognition principles with an integrated time and expense module to include when and how much to recognize once it has been earned.  This assures that you are able to adhere to legal compliance as per US GAAP requirements put in place over the past couple of years.

    Many Professional Service firms manage billable time and expenses through an assortment of excel spread sheets which increase the possibility of data entry errors and it could be weeks before you realize that your project is way off track or over budget.  With Microsoft Dynamics GP and JOVACO Project Suite, Professional Service firms have more visibility into projects they are currently working on to evaluate if they are on time and on budget. Until now, you didn't even know it.  Start making more informed decisions when managing your projects.

    By JOVACO Solutions, Microsoft Dynamics GP reseller in Quebec

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