Do you need project accounting software?
From the The Money Files Blog
by Elizabeth Harrin
A blog that looks at all aspects of project and program finances from budgets, estimating and accounting to getting a pay rise and managing contracts.
Written by Elizabeth Harrin from RebelsGuideToPM.com.
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You can manage your project finances in a spreadsheet, right? That’s what I do. Admittedly, by the time you have done one for capital and operating costs, one for invoice and purchase order tracking, plus a general budget reconciliation of spend against forecast, you do end up with some pretty complicated spreadsheets. Is accounting software the answer? I spoke to Reginald Howatson, Director, Sales and Marketing, at JOVACO Solutions, Inc., to find out if it would really help.
Why is it important to have project accounting software?
To be able to track expenses, and time against projects to better manage costs and profitability of projects. As customers become more price conscious, making accurate and precise estimates, respecting time and cost budgets and using resources effectively have become a part of the challenges that your business must face every day.
Fair enough. But why won't ordinary accounting software do the same thing?
Basic accounting software does not offer the required functionality to manage projects with the level of detail required to view the different levels of the projects. You can no longer afford the luxury of approximating costs or tracking projects by simply using Excel spreadsheets.
Oh. So how can project accounting software contribute to project success?
Project accounting software contributes to the success of a project by managing budgets, time and evaluation of specific Key Performance Indicators. Access to meaningful and complete management information is crucial for any project manager. You have a rich and unique source of information that you can use to produce a wide range of reports for your project analysis, your organisation’s profitability as well as ad-hoc analyses and key performance indicators.
OK, that makes sense. It’s like a dashboard for project finances, with some extra stuff included too. I expect this is also useful for managing benefits once the project is complete. What's your top tip for project managers having to manage project finances for the first time?
Choosing a single platform for managing project finances and using an integrated solution makes managing easier since data is integrated from virtually any source, such as your ERP, CRM and Business Collaboration platform.
A single platform, as long as it isn’t Excel. Got it. And what's the mistake you see most frequently?
By not using project-based business management software and integrating all the features required for project accounting you increase your administrative costs. Data is not shared and is not easily accessible thereby slowing down staff and negatively impacting their work and the profitability of projects.
While budget estimates or erroneous delivery dates can result in significant changes in the costs, it could even make you lose business opportunities or increase billing cycles. As a worst case scenario, it is like financing your customers.
The dashboard concept must mean that information is quickly, and that must be a help for decision making.
With today’s technology, you can now access reports on the web from your project accounting software in real time, anytime and anywhere. For example, using web based time management software integrated into your project-based management software; you can keep track in real time of your project's profitability and solve problems as they occur. Project managers have access to all the tools necessary to manage their projects.
Thanks, Reginald.
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I'm personally not yet convinced that implementing project accounting software would make much of a difference to the way I manage projects. If your Finance department use spreadsheets, chances are it will be easier to use the same approach as they do. On top of that, once the spreadsheets are set up, you can use the same templates over and over. Still, in large project-based organisations this type of software has a place. Have you used anything like this before? What's your experience?
More on my interviewee:
Reginald Howatson is the Director of Sales and Marketing at JOVACO Solutions, which specialises in project accounting software for professional services firms. He has extensive experience in ERP software sales and marketing, and is a prior Chair of the International Association of Microsoft Certified Partners.
Posted on: August 13, 2010 03:41 PM |
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Comments (5)
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Craig Golby
Managing Director| Dignitas Ltd
Solihull, United Kingdom
An interesting article, but this isnt really a new conversation. There are two things that really worry me about the suggestions behind this article.
1) Yet another stand alone solution designed to "help" the Project Manager
2) Most firms running Projects will already have their Corporate Accounting System in place, why would they add another wholly expensive layer to this ??
What Project Managers really need are light touch, integrated solutions that give them a single repository for their Project Information, which can be accessed and updated by Project Team Members that they authorise, and which as a result of the continuous information throughput gives them a dashboard view of all that is going on allowing them to trap and control the key issues before they become a problem.
There are many out there, but our own CredAbility (www.credability.info) provides the key Project Tools, including Risks and Issues, Actions and Change Controls, Time & Financial Management, it incorporates Earned Value characteristics, and presents everything in a hierarchy allowing you to see the status of Workstreams, Projects, Portfolios or Company and Corporate spread Projects at the click of a button.
Michael Camp
Synergy Business Solutions
Seattle, Wa, United States
Excellent interview. There''s a couple things I would add:
(1) Project accounting software can integrate with Excel too. For example, Microsoft Dynamics SL, which has a whole set of project management and accounting modules, integrates with Excel and moreover, third-party software like Analyst can transform Excel into an ideal environment for reporting and budgeting. In short, project accounting software can make Excel even better.
(2) You really don't get the full integration capabilities unless you have a corporate accounting system that is designed to integrate with project management and accounting. So, the answer Reginald gives is not suitable unless one is looking to replace their non-project-accounting-compatible system with a new financial management system. If that's the case, it's a great long-term solution.
For more information, search for my book on Ganthead: 7 Secrets the Healthiest Project-Driven Organizations Know That You May Not or at www.synergybusiness.com/7secrets
Michael, thanks for pointing us towards your book, and for your comment.
Kwiyuh Michael Wepngong
Community Champion
Financial Management Specialist | US Peace Corps
Yaounde, Centre, Cameroon
Nice interview... The value derived from using a software is great
Many project managers start by managing their finances in spreadsheets. At first, it seems like a practical solution. You can create separate sheets for budgets, invoices, purchase orders, expenses, and forecasts. However, as projects grow, these spreadsheets become increasingly complicated, difficult to maintain, and prone to errors. Updating multiple files manually can take a significant amount of time, and even a small mistake in a formula can lead to inaccurate financial reporting.
Traditional accounting tools improve on spreadsheets, but many of them still have limitations when it comes to project-based financial management. Most standard accounting software focuses primarily on recording transactions and generating financial statements. While these features are important, they often lack detailed project tracking, real-time profitability monitoring, automated bookkeeping capabilities, and advanced insights that modern businesses need. As a result, project managers may still struggle to understand the true financial health of their projects without spending hours compiling reports manually.
This is where modern AI bookkeeping software is changing the game. Businesses today need solutions that not only record financial data but also help them make smarter decisions. The best bookkeeping software should automate repetitive tasks, provide real-time visibility into expenses, and help teams stay on top of budgets without requiring constant manual intervention.
One platform worth considering is HelloBooks AI. As an AI accounting software solution, it is designed to simplify bookkeeping and financial management for businesses, freelancers, agencies, and project-driven organizations. Instead of relying on complex spreadsheets or outdated accounting systems, users can automate many routine financial processes and gain instant access to important financial information.
What makes AI based accounting software particularly valuable is its ability to reduce manual work. With automated bookkeeping, transactions can be categorized automatically, expenses can be tracked efficiently, and financial reports can be generated with minimal effort. This not only saves time but also reduces the risk of human error that often occurs when managing finances through spreadsheets.
Another common challenge with traditional accounting software is the lack of integration between different business systems. Project data, customer information, invoices, and financial records often exist in separate platforms, forcing teams to switch between multiple applications. Solutions like HelloBooks AI help address this problem by providing a more unified approach to financial management, making it easier to access and analyze business data from a single location.
Real-time visibility is another area where many older accounting solutions fall short. By the time reports are prepared, the information may already be outdated. Modern AI bookkeeping software provides up-to-date financial insights that help project managers identify issues before they become major problems. Whether it's monitoring project profitability, tracking expenses, or reviewing cash flow, having access to live financial data can significantly improve decision-making.
For businesses looking to move beyond spreadsheets and basic accounting systems, exploring an AI accounting software platform such as HelloBooks AI can be a smart next step. While every organization has unique requirements, adopting automated bookkeeping technology can help reduce administrative burdens, improve accuracy, and provide better control over project finances.
In today's competitive environment, businesses can no longer afford to rely solely on spreadsheets or outdated financial processes. The best bookkeeping software is no longer just about recording numbers—it is about providing actionable insights, automation, and efficiency. Platforms like HelloBooks AI demonstrate how AI based accounting software is helping organizations modernize their financial management and focus more on growth rather than manual bookkeeping tasks.
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