The Money Files

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!

Did you get any gadgets for Christmas? And are you still using them now? Gadgets like tablets and smartphones and the apps that go with them can help you work more efficiently.

You might have noticed the increasing trend towards Bring Your Own Device, and your company might already have policies in place about allowing you to access work data like information about your project on your personal devices. This trend shows no sign of stopping and this year we’ll probably see more and more companies adopt security policies that let employees use their own smartphones for work purposes. It helps them keep costs down but it does increase the admin and management and open up risks for sharing confidential data so if you are going to BYOD, make sure you do it within the official guidelines of your company – if in doubt, talk to your IT team about what you need to do to secure your device.

So, enough about policies and security, on to the apps. Well, actually I’m not going to focus on specific apps that will help you manage your projects because what’s available changes all the time. Instead, here are some things to look out for when you select what apps you want on your device for work:

1. Apps that allow access to your project management online tool

Many project management tools that are available as hosted solutions now come with mobile interfaces for Android and iOS that enable you to use them on your tablets and smartphones. This is a good place to start because if you already use an online project management tool the chances are you’ll want to access it on the go.

Check the company’s website to see if they offer a mobile app version of their product and then download it to your device. You’ll probably need to use the same login and password to access the site and then you should be able to see all your project management data from your phone. Some apps have limited functionality or views, so check out what you can see and do before you expect to need to use it while travelling so you aren’t surprised!

2. Apps that integrate with your online project management tool

Another place to look for apps is those that integrate with your online project management software. Again, check the website or blog from the company that provides your software as it is there that you’ll be most likely to find information about what social networks or apps have full integration with their products.

The most useful integrations will be things you already use regularly or could make use of, such as Google Docs or email tools but it could also be useful to look at what you could do differently and how you could update your plan. For example, some tools allow integration with social networks like Twitter and Yammer and these can be used to provide real time status updates for your project – useful if your project team want to update their progress on the go.

3. Apps that help you work

You can also download standalone apps that help you work more productively. Many are free but there are some you’ll have to pay for if you think you’ll get the value from them. My current favourites are Pages (the word processing app for my iPad) and Dragon, which is a voice recognition tool that means I can dictate text and don’t need to use the keyboard to record my thoughts. It only works when I have an internet connection, but I can cope with that.

There are so many tools available to you for tracking time, managing meetings, storing tasks and so on – you’ll have to try a few to see what works for you but try to mirror how you work offline so the change to your working practice isn’t too big and is sustainable. Otherwise you’ll find that the app creates more work for you and really doesn’t boost your productivity.

4. Apps that help you keep in touch with project teams

Finally, look for apps that will help you keep in touch with your project team members. Things like Skype fall into this category, along with other apps that allow you to do instant messaging, set up group chats or collaborate somehow. This normally only work if the other team members have the same apps on their devices, so you’ll need to collectively agree what to use and how to use it, otherwise you won’t get any value from it!

What if team members don’t have a gadget with apps on? Don’t let them feel left out. You’ll have to build other communication channels into your project or take the discussion off your device completely so that you can successfully integrate everyone in the team.

When you search for apps, look for ones that are up to date and with good user reviews. Don’t be afraid to stop using it if it doesn’t work for you or your team. And of course, use your gadgets considerately, following good gadget etiquette when at work!

What are your favourite apps at the moment? Let us know in the comments.

Microsoft Project 2013 gives you a number of ways for handling resource costs including standard rate, overtime rate, cost per use and another field to let you accrue resources at a cost. Let’s take a look at these and see when you might want to use them.

Standard Rate

If you use resource costs in Microsoft Project at all, this is the cost field that you will find the most useful. It’s, as you would expect, the normal pay rate for someone or something over a time period. For people, Project will default to a per hourly rate but you can use a different unit of time if you want – just change the setting. Or you can work out their hourly rate based on their monthly or weekly rate and enter that if you want to keep everyone standard by calculating hourly rates for all your resources.

Non-people resources are not calculated on an hourly rate. Instead, they are worked out by price per unit. You’ll have to work out what units you want to use. Use the Material Label field to record what unit you have set. For example, if you are hiring a software testing lab at $1500 per day, you can use the Material Label field to record ‘daily lab fees’. Then Project does the calculation for you – quantity multiplied by standard rate.

Cost per use

Only use this if you have certain resources where you only pay each time you use the resource, and it’s a flat fee. An example would be a call out fee for a plumber for your new office conversion. Each time you call on the plumber, Project will calculate the hourly rate plus the call out fee. You can also use this for delivery charges.

Overtime Rate

Another field that does exactly what it says, but it doesn’t apply to non-people resources. Leave it blank unless you pay your team members overtime for hours worked above and beyond their contracted hours. If you do want to use the overtime function, you’ll have to assign overtime hours to the resource, otherwise Project will assume they are either salaried and don’t get any extra payments or that they earn the same amount regardless of how many hours they work.

Of course, you don’t have to use Project to calculate overtime payments for your team, and it can get quite complicated to keep on top of what’s an overtime hour assignment and what’s normal working time. But if you are expecting Project to calculate your total project budget for you, you’ll need to make time to record all this data otherwise your expense figures will be out.

Accrue At

This field is only useful if you are bothered about when the money is spent. On many projects, this won’t make any difference at all, as your project sponsor will only be interested in the overall budget and estimate to complete. But there might be times when you need to know if you’re paying out the money in advance or after the job is done.

You’ve got three choices here:

1. Start
2. Pro-rated
3. End

They are pretty self-explanatory. ‘Start’ means the cost goes at the start of the task, so you’ve paid upfront. ‘Pro-rated’ means it is spread out across the duration of the task. And ‘End’ means you pay when the work is completed.

It’s fine to record this level of detail in your project plan for expense tracking purposes, but you’ll need to know how to read the reports to interpret it! That’s beyond the scope of this article. But hopefully this has given you a flavour of how to use the different resource cost settings in Microsoft Project and you can choose which ones (if any) are useful to you on your project.

How did you do with sticking to your resolutions from last year? If you are anything like me, you would have started out with good intentions and then forgotten all about them as the snow melted.

This year it's not too late to make some resolutions about managing your projects more effectively, and make them achievable so you’ll actually stick to them throughout 2014. There’s no point in setting yourself unrealistic targets, so let’s look at some project management resolutions that you could still be doing next December.

1. I will do timesheets (and get my team to do the same)

If you don’t use timesheets already, make 2014 the year that you start. They are essential for finding out where your time is actually being spent, and you can use the data for loads of things including improving your estimates.

Do them regularly and you’ll find that you aren’t blocking out 7 hours per day to a bucket task called ‘project management’. You’ll get the granularity of detail required to understand exactly what your project management effort is being spent on – reporting, budgeting, team management and so on. And then you can assess whether that’s reasonable or not.

Break down your resolution into manageable chunks such as:

• Quarter 1: Select project management timesheet application
• Quarter 2: Implement application and train staff
• Quarter 3: Bedding in time, we all start using it
• Quarter 4: Aim for timesheets to become business as usual.

2. I will understand what the Finance team actually does

How much do you rely on your company’s Finance team to help you understand and manage your project budget? They are the experts about your business’ financial processes, forecasting and managing budgets, so you may as well use them. On some projects, you may have a financial analyst allocated to the project team on a full or part time basis too.

Here are some videos to help you get started understanding the role of the different Finance teams:

• Treasury team: http://www.projectmanagement.com/blog/The-Money-Files/6144/
• Accounts Receivable: http://www.projectmanagement.com/blog/The-Money-Files/6108/
• General Accountants: http://www.projectmanagement.com/blog/The-Money-Files/6034/
• Accounts Payable: http://www.projectmanagement.com/blog/The-Money-Files/5890/

3. I will improve my estimating

How good is your estimating? If you feel that your project team needs to understand why estimating goes wrong and they could do with a bit of help when it comes to getting their estimates spot on, why not make that the focus for 2014? There’s a lot that you can do to help the people in the team manage the estimating process more effectively, and also estimating tips that you can give them.

Here are some more video resources to review:

• The Estimating Lifecycle: http://www.projectmanagement.com/blog/The-Money-Files/6443/
• Parametric estimating: http://www.projectmanagement.com/blog/The-Money-Files/6343/
• Analogous estimating: http://www.projectmanagement.com/blog/The-Money-Files/6231/
• Bottom up estimating: http://www.projectmanagement.com/blog/The-Money-Files/6567/
• Team roles in project estimating: http://www.projectmanagement.com/blog/The-Money-Files/6672/

4. I will include financial updates in my reports

Project status reports don’t always include a section on finances. This could be because your project sponsor isn’t that interested, or because you are sharing the information with people with whom it wouldn’t be appropriate to discuss the project finances with. But if your reports don’t include a budget update, you should be clear why this is – don’t just leave it out because it’s too hard or because you don’t know what to include.

Talk to your sponsor about what he or she would like to see in your status report and provide budget updates as required on at least a quarterly basis.

5. I will quantify the cost of risks

Does your project risk log include the financial impact of risks? Many don’t, because many risks aren’t quantified like this (or at least, many project teams don’t bother to quantify them like this). Of course, quantifying your risks in a financial way may not be appropriate for all the risks on your log. There are probably some risks that affect the project in ways that will not have a financial impact, or where you’ll be trying to calculate the financial impact based on some arbitrary figures.

But there will be a financial cost for many project risks. This is either the cost of the risk occurring or the cost of the mitigation plan – either way you can calculate the impact and then add this to your project budget so that you are clear about what implications the risk has on your financial planning for the project.

Will you use any of these as your resolutions for 2014? If not, what are you having as your resolutions instead (if any)?

Elizabeth Harrin is Director of The Otobos Group, a project management communications consultancy. Find her on Facebook.