1、Best Practice Financial Processes: Project Accounting,Project Accounting - Best Practices Objectives,Project Accounting Objectives,Organisation,People,Processes,Controls,Measures,Information Systems,to record and maintain costs and time at a project and task level to maintain project assets & Work I
2、n Progress to bill / charge for jobs carried out to assist in planning, scheduling and controlling projects to measure ongoing profitability and technical effectiveness of projects and enable corrective action to be taken,Bridge between financial management & project management,Establish project str
3、ucture and type Create new project Allocate budget Track actual costs and time Review projects progress Bill or capitalise costs Close project,Monthly reporting Reconciliation to other modules Physical progress Invoices being paid,Key performance indicators Profitability of project Variance analysis
4、 (cost, time & materials) Achievement of technical objectives,On-line timesheet input Eliminate rekeying of data Integrated systems,Empower project managers To control information and take corrective action,A logically defined project & task numbering system is used with a project / job number that
5、allows division and reporting by logical elements or segmentsA facility to predefine a list of project typesEstablish who owns, who controls and who monitors the project,Budget established in financial and quantitative terms as an optionBudgets by individual property and group of projectsReforecasti
6、ng / multiple budget facilityMulti currency budgetingInformation from past projects available to assist with estimate of future project costs,Direct costs allocated per timesheet entry Indirect costs per timesheet/ algorithmsCollect costs in line with project milestones / phasesVarious ways of colle
7、cting costs; full cost, marginal, direct costs, direct costs and uplift, etc,Actuals and commitments (ie PO) raised against project budgetMonitor against defined milestonesConfirm physical progress of projectAmend budgets for known costs overruns / savings,Project costs can be allocated to departmen
8、ts or billed to customers at appropriate times Charge against agreed milestones,Best Practice Features,Project Accounting - Best practice features,Establish project,Allocate budgets,Allocate costs & time,Review project progress vs costs & budget,Bill or charge for project,System records all necessar
9、y project data Any level of project task hierarchy is permitted,System allows budgeting at the lowest or highest task level Budgeting can be on a cost time, material or revenue basisStandard as well as value budgetsMarginal or full costing basisNotes facility to support documentation of all budget a
10、ssumptions,Integrated to financial & HR systems to aid input Time costed at multiple ratesAutomatic interface with inventory / accounts payableMulti currency costsMarginal or full costing basis,Software supports standard & ad hoc reporting and variance analysisSoftware supports on-line enquiry by pr
11、oject managementReal-time check against projects budget when raising POsDrill down to source features available,Integrated with billing system or internal charging system Integration with fixed asset system for capital project capitalisationMulti currency billingIntegration with GL for cost rechargi
12、ng / allocationInterim / final invoice to move costs from Work in Progress,System Features,Project Accounting - Best practice features,Establish project,Allocate budgets,Allocate costs & time,Review project progress vs costs & budget,Bill or charge for project,Project Accounting - Critical Success F
13、actors,Project team led, finance supported. Participative approach to financial project management leading to real buy-in; Comprehensive communication and training to maximise benefits of better information Standard formats and means of data collection / consolidation in place with manageable level
14、of detail; Timetable in place with deadlines for inputting costs and timesheets agreed; Guidelines clearly defined and communicated; Effective communication and feedback mechanisms in place between central group(s) and project / job managers; Approval levels and responsibilities clearly defined; Eff
15、ective use of management time during the review process; Integrated systems in place with software to support on line reporting and analysis by operating management; Strong analytical support to decision making, by both finance departments and project teams; Efficient use of IT, to ensure project ma
16、nagers receive timely and accurate information.,These are the a summary of the key business requirements which must be met to achieve Project Accounting objectives:,Project Accounting - Issues and Trends,Link with work management / resource scheduling,Trends,Link with project management tool for fin
17、ancial and project reporting,Projects often will across financial / fiscal years, this can make year end accounting complicated,Issues,The trend is towards integrated systems / bespoke solutions tailored to meet sector specific needs,Propriety project management tools (eg PMW, MS Project) have only
18、high level financial reporting, job and project costing modules have no progress reporting or planning functions - no good solution currently available. The trend is to integration and data warehousing,Independent “closing“ or cleardown of project details from fiscal year close in main financial led
19、gers,Project Accounting - Projects Classifications,Projects can be broadly defined as: Capital projects such as network building; Billing projects which are customer facing projects and result in the customer being invoiced during the life of the project or at the completion of the project.,Project
20、Accounting - Level 0 Context Diagram,Project,Accounting,Employee Details,Capex / budgets,Project Accounting,Fixed Assets,Purchasing,Human Resource,General ledger,Capitalised assets,Project details,Purchase Orders (commitments),Payables,Receivables,Invoices,Work management scheduling,Works orders and
21、 tasks,Supplier invoices,Customers,Time information,Contract details,Invoices & project details,External suppliers (eg sub-contractors),Program reporting,Milestone definition/targets,Budgeting & planning,Time recording system,Inventory,Goods booked out,Surplus items,Project Accounting - Level 1 Over
22、view,Standing data Request,Budgeting procedures Authorisation procedure Technical Policy / requirements Project Accounting Policy,Management Accountant Technical support Budget holder Project owmer,PA structure,Achieve information,Authorisation rules Reporting rules Technical standards PA procedures
23、 / templates,Management accountant Project managers Financial accountant Budget holder,Reports,Progress reports,Financial procedures PA procedures Management feedback Technical Feed back,Authorised project,Communication and reporting guidelines PA procedures Management feedback Technical Feed back,M
24、anagement accountant Technical Staff Project Managers AP system PO system Time recording system,Technical staff/operations Project Managers Financial accountant,Project authorisation documentation,Updated project details and costs,Time and costs,Closed project,Customer invoices,Capitalised costs,Sta
25、tus guidelines Notification procedures FA procedures Review procedures Consolidate procedure Reporting guidelines Review Procedures Reporting & authorisation procedures Budgeting procedures Clarify procedures Archiving procedures,Management accountant Project managers/owner Directors Budget Holder B
26、illing system FA accountant/system Asset management system,Project Accounting - Appendix 1 : IDEF Process Flow,The diagram below provides a key to the process diagrams used in this document.,Process / activity,Controls,(i.e.,Procedures Standards Requirements for rework),Output,(i.e.,Information Material),Resources,(i.e.,People Functions IT systems Machines),Input,(i.e.,Information Material),
