Your Projects Are Profitable, Aren’t They?
Can you answer that with any level of certainty? If you’re like most project based companies, chances are you don’t really know. It’s not that you’re not managing your accounts properly, it’s just that a byproduct of running a project without proper project accounting controls in place is the lack of clarity into profitability. And that lack of clarity can create a myriad of issues related to revenue recognition, future estimating and resource allocation.
Projects Aren’t Standard
With standard accounting, you’re dealing with accounting for the company as a whole, usually on a fixed timeframe. You’re looking at totals, across the whole company, and managing checks and balances. That’s great for your general ledger, but it’s not giving you the granular detail you need to monitor the finances of individual projects.
There are 3 major things that can impact your ability to recognize every dollar in revenue, and accurately account on a project by project basis:
- Expenses arriving after the project has been invoiced, essentially creating cold write-off’s
- 3rd party invoices aren’t timely, which negatively impacts your ability to determine true costs
- Manual or Excel-based timesheets that don’t integrate with your core financial system, which undermines your cost basis
All these things have 1 thing in common – in absence of a proper tool for tracking and managing these moving parts, they leave you in the dark. It’s a patchwork of guessing that often fails to deliver.
Ineffective Accounting Processes Undermine Your Business
There are significant risks a business takes when it neglects to adopt a project management platform. Risks that go beyond straight profitability, and have an insidious impact on your business as a whole.
Risk that include things like:Under bidding on projects: without accurate, historical data to leverage, each RFP and estimate must be created from scratch with a good level of educated guessing. Your estimating process never matures, and you risk taking on projects that aren’t profitable in the first place.An overall lack of efficiency: when each project is built from the ground up, there is no way to capitalize on repeatability. This increases administration time for every project, and increases the chance of error.Repeated workflow issues: trying to manage projects using standard accounting methods does not allow you to pinpoint and correct issues such as difficult invoicing processes or vendor collection delays.Lacking total controls: when you use standard accounting processes to manage project accounting, you don’t have the same level of control. You can’t track your budgets, resources and revenues to the specific project, and you’re unable to get an accurate view of project hours to date and expenses related to project milestones.Working with inaccurate data: manual timesheets, random expense tracking, vendor invoicing and working without access to the information you most require means more guesswork and chance for costly error.
Microsoft Dynamics Enables True Profitability
No business sets out to leave money on the table, but when you lack proper project accounting, that’s exactly what you’re doing. Your clients are getting free work out of your best resources, you’re absorbing project expenses that should be charged to someone else, and you’re incapable of accurately estimating on future projects, because you don’t know how well you’re doing on the current ones.
All in all, it’s expensive and it chips away at your bottom line.
Your projects have the most significant impact on your revenue and profitability is your number 1 goal. It’s time to mature your operation and get in line with a proper project accounting solution, built on Microsoft Dynamics, designed specifically to address the challenges faced by a project based company.
Project accounting enables you to:
- Better capture time and expenses: with fully integrated timesheet and expense functionality, users can track time and expenses accurately to the specific project task – from anywhere. This reduces errors in time capture, enables management to track actual time to budget, and ensures your expenses don’t become your write-off.
- Get an accurate view: analyze the financial performance of individual projects, review resource consumption and earned revenue in real time, and monitor project profitability by using revenue recognition and work in progress.
- Improve project estimating and quoting: insulate yourself from unprofitable projects by leveraging accurate, historical data and reports for more accurate and efficient project budgeting.
- Manage different project types: set milestones, manage tasks, apply budgets and recognize revenue across multiple project types at the same time.
- Improve your cash flow: with accurate data in an accessible and centralized location, you’re able to bill faster and get paid sooner.
The Right Tools from the Right Partner
Rand Group knows the pain of project accounting, because we lived it ourselves. And we know the extensive benefits that come from altering your accounting processes to better align with your business. As a Gold Certified Microsoft Dynamics Partner with extensive experience working with project based businesses, we can provide a real solution to problems you might not even know you have.
Rand Group provides all-in-one project accounting solutions built on:
- Microsoft Dynamics AX
- Microsoft Dynamics NAV
- Microsoft Dynamics 365
- Microsoft Dynamics GP
- Microsoft Dynamics CRM
Both Cloud (Azure) and on-premise options are available to suit your specific needs.
Schedule a Meeting with our Project Accounting Software Specialist
– Software Delivered as Promised. No Surprises.