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Categories: budget
1. Euro invoices still require VAT
From time to time I get invoices in euro from suppliers who are based in mainland Europe. The invoices arrive without VAT. But according to local UK regulations, we still have to pay VAT on the services received. Check your local rules! Your accountancy team should be able to help clarify what taxes are required in your country, whether or not these are specified on the final bill.
2. EVM is really not that complicated
There’s lots of jargon and statistics around Earned Value Management (or Earned Value Analysis, whatever you choose to call it) but the basic principle is easy. It’s just a toolthat shows whether you are over or under budget, behind or ahead of schedule, at any given moment in the project. As EVA takes time and effort to do properly I find that it adds limited value to small projects. With a larger project you may find the EVA method useful to help you understand where you are.
3. Tolerance is there to be used, that’s why you agree it
Don’t feel bad about using your tolerances. Your project sponsor really doesn’t want to be bothered by every small change that affects the budget or time delivery for your projects, especially when they don’t make a material difference to what you have already agreed with him or her.
4. On a capital project you can’t capitalise everything
If you are working on a project where pretty much everything is capitalised, even the staff (which local rules might let you do in some circumstances if you are bringing an asset into service), then it’s tempting to think that you can pay for everything out of your capital budget. Unfortunately (again, depending on your local rules), you can’t. For example, even in situations where you can capitalise staff costs you can’t capitalise training. Of course, local accountancy regulations vary from country to country and even within a country, so check with your Finance team before you assume that you can capitalise all your project costs.
5. Accruals are complicated if you don’t plan for them
At the end of the year you will have to accrue for work that has been done but not yet paid for. That ensures that when the bill does turn up, it comes out of this year’s budget, not next year’s – very important if you are trying to balance the books and have budgeted for it this year! But that means you need to tell someone to keep that money aside for when you receive the invoice.
Keep good records as this will be a massive help come year end and it will make a real difference to how time consuming this task is. Take advice from your Finance team and plan early so that you aren’t trying to work out what’s been done but not paid for at the very last minute.
Even better, get your capital accountant to do it for you if you can!
6. One template doesn’t suit all
Your project sponsor wants a different view of the project budget to what works for you on a day-to-day basis. Your detailed tracking spreadsheet is probably too in depth for your sponsor and even some of the project team. Be aware that you may have to present different options for viewing the same data or different types of reports, but be sure that whatever you do, the data is consistent. You really don’t want your own records to be showing one set of figures and then the reports you send out to the Project Board to add up to something different. That’s a sure-fire way to damage your credibility!
Posted on: February 15, 2014 10:40 AM |
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