What’s the key to effective project cost management?

As the professional services industry expands and demand grows, the need for effective project cost management of margins becomes more important than ever before. 

I’m sure like any other professional services firm, your business wants to maximise its margins, increase project profitability, do more with less and so on. But how do you accomplish this? For starters, you need to implement the right tools that remove the need to collate and analyse data from multiple sources.

Microsoft Dynamics 365 (D365) Business Central for Professional Services is one such solution that provides a full range of features and functionality designed to help you achieve more profitable projects. 

Gain knowledge of your cost base

When we talk about margins, we’re looking at the difference between the price you sell a service compared to what it costs to provide that service.

If you want to maximise your margins, you must have a good understanding of your cost base. D365 Business Central for Professional Services provides excellent insights when it comes to cost tracking, such as:

• Resources – create cost matrices for resources, resource groups or project specific costing to help manage, track and forecast costs. Margins can be predicted and controlled. Easily view future expenses without waiting until the end of an accounting period
• Project productivity – as costs are collected and charged to individual projects within the solution, you can take advantage of flexible project structures, billing rates and more to improve project productivity
• Visibility – track, view and analyse costs and revenues for individual projects that are still in progress
  
  

Control your people’s time and expenses 

Typically, the biggest costs associated with professional services projects are people. So, by investing in a solution such as D365 Business Central for Professional Services, you can control your resource, project and travel related expenses. Benefits include: 

• Track project resource and expenses – accurate, timely cost information gives you the precise data you need to increase productivity and make better, more effective business decisions
• Monitor timesheets – quickly view the status of a timesheet to see if it needs to be created, submitted for approval or has been approved
• Intuitive user interface – simplify entry with a single interface, on desktops, laptops, tablets and smartphones to meet the needs of your team. Empower your resources with timecards and expense reports that are single point, easy-to-use time and expense applications 

Create accurate budgets to help deliver projects successfully

The success of a project is usually defined by three metrics: budget, time and quality. Creating an accurate project budget is key to enabling your project managers to successfully deliver projects as they must know the boundaries they’re working in.

Project budgeting is a key feature of D365 Business Central for Professional Services, helping you effectively create, revise, monitor and manage project budgets. Other features include:

• Budget tracking – manage the progress of your budgets from creation through completion with clear visibility. Create budgets for resources, resource groups, items and expenses
• Copy budgets – speed up the budgeting process by copying budgets from previous projects
• Unlimited budget revisions – easily track and automatically update project statistics such as net profit and margin percentage. Monitor budget revisions of the current estimate at completion and forecast projections
• Increase estimate accuracy – compare budget detail with actuals at completion down to the task level. By measuring the accuracy of your budget and evaluating the impact on your profitability, you can easily fine-tune your bidding process to ensure future competitive bids

What are the current challenges facing professional services firms?

There are other key factors that ensure your projects are not only profitable, but also result in a satisfied customer. Hopefully, what we’ve touched upon here will you give a flavour of how Dynamics 365 Business Central for Professional Services can help improve your project management. 

If you’d like to find out more, check out our guide to building an agile professional services firm. We cover some of the key challenges currently facing professional services companies and practical advice on how to solve them.