One of biggest challenges currently facing professional services firms is trying to manage costs across multiple projects. Professionally tracking and reporting your costs – including the daily expenses you might consider unimportant – will warn you before you blow the budget.
There are many tools on the market to help you manage your costs more effectively. But gaining real time, easy to understand financial insights into projects, resources and financials can only be delivered through an integrated solution.
In this blog, we outline eight reasons why you will benefit from project cost management software:
- Gain control over your project costs
- Monitor the status of your projects
- Enhance project collaboration
- Improve project productivity
- Instant expense visibility
- Better resource cost management
- Flexible invoicing control
- Shorten billing cycles
1. Gain control over your project costs
Project cost management software allows you to track, view and analyse costs and revenues for individual projects that are still in progress. Plus, margins can be predicted and controlled and future expenses easily viewed without waiting until the end of an accounting period.
2. Monitor the status of your projects
Too often projects are managed on Excel spreadsheets, leaving you with out of date data. This prevents you from acting swiftly to resolve issues.
Some other problems with using manual project cost management tools include:
- Data entry can be laborious and time-consuming, making it can be easy for manual errors to occur
- Siloed data across planning, estimation, budgeting and control makes it difficult to continuously monitor performance and make quick, proactive responses
- Difficultly in accessing full visibility of your budgets hinders your ability to track planned vs actual spend…
- …and identify where you’re earning/burning money
By having an integrated project cost management, solution, you can easily manage these variables and simplify your processes. For example, predefined and customisable stop lighting helps you monitor what’s important to your company and prevent issues before they begin.
3. Enhance project collaboration
One area that often gets missed is the financial status of projects. Collaboration is key to providing accountants and project managers with a single system that enables them to use the same set of data for better analysis and project accountability. Project data can then be presented in terms that are easy for project managers to understand and use.
4. Improve project productivity
If all projects are consistent in their setup, KPIs (key performance indicators) can be set, reported against and relied upon as there’s only one set of data. Plus, flexible project structures and billing rates help your projects run more efficiently. Costs are then collected and charged to individual projects within a single integrated solution.
5. Instant expense visibility
Set realistic project budgets by taking known or expected expenses into account within projects. Record expenses such as subcontractors, purchasing and labour charges as commitments as soon as they’re entered (even before the end of an accounting period) to allow for the future cost. This also gives you better visibility of expected expense costs.
6. Better resource cost management
Leading project cost management software offers features like cost matrices for resources, resource groups and project specific costing. Working across activities, work types or date spans makes this a scalable feature and a great tool to cost different resources to different projects.
7. Flexible invoicing control
To meet the demands of invoicing from customers, you need the flexibility to assign various billing methods, rate structures and mark-up rules for each project or for a specific invoice. You also need to be able to generate invoices on demand. Group invoices by WBS (work breakdown structure) or resources or single line invoice are all ways project cost management software can help.
8. Shorten invoice cycles
Project cost management software allows you to shorten invoice cycles and improve cash flow by taking control of unbilled receivables and quickly converting them to revenues.
Streamline invoicing with invoice generation, formatting and submission of invoice suggestions then easily note needed corrections, approve invoices and post receivables. When managed through one solution, these activities can be undertaken quickly and effectively.
Give your business a competitive advantage by investing in project cost management software
By implementing an integrated project cost management solution into your business, you can dramatically change the way you manage projects, customers and resources. For example, you can offer better collaboration tools and easily share accurate information with your customers, increasing business efficiency.
Our project cost management solution is built upon Dynamics 365 Business Central for Professional Services.
To read more about its features, download the factsheet below.