I have been asked to review the process for project accounting at my organization and have a couple of questions:
Have any of you had issues with the proper coding of project invoices (knowing when to capitalize versus expense spending)?
How do you handle proper coding now?
Does the project manager or the A/P department do this? Does the project manager understand the intricacies of specific accounting rules?
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Frank WintersPhotographer and ConservationistSandwich, Ma, United States
In my experience this issue must be handled by the accounting deptartment for the reason implied in your question: the project manager can't know the accounting rules well enough for this purpose. Saving Changes...
Dr Mike O'CallaghanCoach & Project Manager| Relevant InternationalCape Town, South Africa
Project Coding: The most effective way to handle this would depending on the duration of the projects and the size of project budgets. Small projects might be expensed to the Sponsor's department. Large/longer projects might be assigned a cost code. The coding of invoices to the project cost code should be similar to coding that exists in the corporate. Obviously, some new codes might be created specifically for project-typoe expenses, but generally, corporate codes exist. Some decisions will have to be made about how the budget is handled. For example, does IT charge the project for resource time. If so, which cost code handles salaries (IT or Project) for the duration of the project. This becomes more difficult to sort out when resources arre outsourced.
Who is responsible: Once again, this depends on size of project. On a large project, one might have an accounting officer as part of the project team. One might have a Project Administrator to handle inviocing. On small projects, the corporate accounting officers might be able to handle things.
Perhaps a good idea would be to class projects according to size and to setup accounting rules accordingly. Saving Changes...
