Project Management

9 Financial Management Tasks for Program Managers

From the The Money Files Blog
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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 GirlsGuideToPM.com.

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In this part of my occasional series on program cost management, inspired by The Standard for Program Management (Fourth Edition), I’m talking about 9 financial management tasks that you should expect to do as a program manager.

  1. Identifying changes

First up, be aware of what might be coming over the horizon to influence the budget baseline and what factors are leading to changes. This is basically being aware of what might create a change so you can be on the look out for any changes. It’s proactive listening and always considering what a course of action might do to your budget.

  1. Monitoring for impacts

Part of the daily work of a program manager is keeping your eye out for any environmental factors that might impact the program overall, and budget changes are part of that. These could be environmental factors like changes in regulation, access to skilled resources from the local hiring pool, or access to the right technology – anything that could have an impact on the budget.

  1. Managing changes

What happens after you scout the horizon for things that might change your program budget? You find things. Part of a program manager’s tasks is to manage those changes. The change could be to scope, to the schedule, to the resource profile, procurement plan, or anything else, and we have to play back what impact that is going to have on the budget and build in the changes.

  1. Monitoring cross-project impacts

As I mentioned in my last article, part of my role as a program manager is being able to shift funds between pots to ensure the overall program goals are met. That’s what this task is all about: monitoring the impact of what happens when costs are reallocated and making sure that overall the program components are balanced – or at least as balanced as they can be.

I mentioned cross-project impacts in the heading, but programs often include an element of BAU work and that can just as easily be affected by changes.

  1. Monitoring supplier contracts

Some suppliers might be contracted at a program level, so it’s the program manager’s job to ensure that suppliers get paid in line with their contracts. With one supplier I worked with, we had contractual milestones in place. When each milestone was reached, another stage payment was due.

Part of my work was ensuring Finance was aware that a stage payment was due so they could have the right amount in the bank accounts ready to pay when the time came.

  1. Earned Value Management tasks

If your program uses earned value management, you will work with control account owners, project managers and other experts on the team to make sure EV practices are implemented and adhered to. Part of the role will also be making sure everyone can interpret the outputs of EV reports and manages their part of the schedule accordingly.

  1. Dealing with over and underruns

It’s unlikely that your program will be perfectly on budget every month because that would rely on your estimates being perfect and no ‘real life’ happening during the work. It’s more likely that you’ll be a bit under or a bit over.

Part of the program manager’s role is to manage within that tolerance and to advise and support project managers on the program to do the same.

  1. Working with stakeholders

Another big part of program management is communication and engagement with stakeholders around changes. The sponsor, customer, client and governance groups (including auditors) need to have access to transparent information around the program’s financial measures. You have to provide that.

  1. Managing within tolerance

Finally, the main, most obvious part of the role is to manage the program’s spending within the levels expected. You may have set tolerance at individual component level, or there may be other ways you are managing to within the expected parameters. These should be clear, so everyone knows how the work is being tracked.

And, if you spot that you are not managing within the parameters and boundaries set, then as the program manager it’s your role to take steps to get back on track, whatever those actions might look like.

Posted on: July 19, 2022 08:00 AM | Permalink

Comments (5)

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Hello Elizabeth
many thanks for sharing, clarifying the financial tasks an individual may do as program manager.
On the organization i have work on, such tasks are common performed by the accounting, financial departments. It implies having a person of those departments on the "program". How do you manage, track, program budget (excel, email, project, other,)?

That's the same as what we have: a finance person responsible for program level reporting. It's done in our financial management tool, with extracts in Excel because that's what's compatible with most people's brains :)

Thank you for sharing your knowledge and perspectives with the community, Elizabeth.

How do you see the role of benefits realization management in the financial area of program management - for instance, identifying financial and non-financial benefits and detailing how financial and non-financial benefits will be quantified and measured? Thank you!

Absolutely agree that PMs need to be on top of budget and funding changes. Don’t leave it to your analysts! Get involved quickly!

Thank you Elizabeth for sharing.

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