Stafiz is project financial management software that adapts to your activity
Visit the project management page to find out more.
Step 1
Understanding project financial management software
We need to define project financial management to understand how project management software can help you improve the efficiency and performance of your business.
a. Centralization of project data and financial consolidation
When a company operates in project mode, its performance is determined by the sum of the performance of each individual project. A project financial management tool centralizes all project financial data. With this type of software, performance can be analyzed at the level of each project, or by consolidating groups of projects, or even all projects.
b. Project budget
To estimate the performance of a project, it is necessary to compare the project data at the end of the project with the initial budget. A project budget must determine the time to be spent by all resources on the project, the costs associated with this time spent, the costs and purchases made as part of the project, and the amounts collected when the project is sold.
This data, which makes up the budget, is used to analyze the financial performance of projects.
Project financial management software makes it easy to create budgets for each project, with a level of detail that can go down to the task or sub-task on the project.
c. Calculating the financial situation of projects
Once the budget has been set, you need to be able to compare reality with the initial budget. Project financial management software enables you to track all project-related costs:
- Costs associated with time spent by in-house staff
- Project costs
- Purchases made as part of the project
- Costs of subcontractors who contributed to the project
These costs must be recorded as they are incurred, so that the project's financial position can be correctly calculated.
At any time, the project financial management software must be able to indicate the past costs on projects, according to the period. When the project generates a turnover, the software allows to indicate the profitability at the date of the project, and if possible the profitability at the end of the project, taking into account the future costs for the remainder of the project.
Step 2
Why use project financial management software?
Here are the 3 main reasons to use project management software:
a. Track project costs and profitability
Project reporting makes project management easier. For a project to have a positive outcome, not only must the project objectives be achieved, but they must also have been executed within budget. For example, if a project has achieved its objectives, but has consumed twice as much of its budget as planned, it probably cannot be considered a success.
Project financial management software makes it possible to analyze project performance. And this analysis makes it possible to define the reasons for success or failure: which phases of a project cost more than expected? Do organizational changes need to be made to improve performance? Which cost items have led to deviations from budget?
This management control enables us to better appreciate the reasons for project successes and failures, and to draw the necessary conclusions to encourage continuous improvement.
b. Anticipating discrepancies / helping to make decisions
Project managers need support in managing their projects, to enable them to make the right decisions.
In addition to monitoring and controlling the progress in project management and the completion of tasks, the project managers are responsible for ensuring that the project is completed within budget. That is to say that the project costs remain in line with what was planned.
Project financial management software gives project managers full visibility. With this information, they can anticipate a risky situation and take the necessary decisions to correct it.
By knowing well in advance the risks of cost overruns, as well as the risks of project delays, corrective action can be taken to restore the situation. By anticipating risks, project managers have a very high probability of returning to budget. Conversely, when a project manager only becomes aware of the situation at the end of the project, without having any visibility of the risks at the end, it is often already too late to improve performance.
c. Prepare accounting entries
A business operating in project mode is likely to need accounting adapted to this mode of operation. Specific accounting entries are required for project follow-up.
Typically, the methodology for tracking costs and recognizing sales for a project activity may vary. Differences between project progress and invoicing also require specific accounting entries.
All these elements can be automated in project financial management software. Calculations of project progress, recognition of sales and margins, and invoices to be issued are all calculated directly and automatically.
Step 3
The benefits of financial management software
There are 3 main advantages to using financial management software:
a. Reporting allows you to gain visibility
First and foremost, the gain in visibility enables us to know the situation and performance of the business. When the level of reporting detail is at the project level, managers are provided with a range of key information. This visibility enables them to improve each project, but also to have information on the portfolio of projects for which they are responsible.
The management software consolidates data at different levels to provide a complete analysis:
- Portfolio performance of a project manager
- Customer-level performance
- Team performance
- Business unit performance
- ...
b. Empowering teams
By bringing this visibility to the project manager, he or she is empowered. They are provided with all the data they need to manage project performance independently. This forces managers to make better decisions, and to grow in their role.
c. Correct the course before it's too late
Project financial management makes it possible to anticipate potential risks and correct them before they occur. This anticipation is a major advantage, as it gives project managers the means to choose between different corrective actions.
Step 4
How to choose project financial management software?
To choose the right solution for your business, you need to draw up a set of specifications, or at least a list of criteria that will enable you to filter through the various software packages on the market and select the one that's best suited to your needs.
a. Establish a list of criteria
To start with, you need to draw up a list of the criteria you're going to review with the software products in your benchmark.
Here is an example of criteria/questions you can analyze:
- What types of costs can be tracked (subcontracting, expenses, internal staff, products, etc.)?
- How are sales calculated?
- How much reporting is available to a project manager?
- How are financial data consolidated (analysis angles)?
- How to create a project budget
- How does profitability analysis take future costs into account?
- ...
b. Benchmarking
Once you've drawn up your list, the demos you'll run with the various software packages you've selected will enable you to confirm the software's answers to each of the points raised, and give them a score to sort them by.
This approach will help you select the most suitable project financial management software for your business.
Final thoughts
The project financial management software provides comprehensive support not only for project managers, but also for the management of companies working in project mode.
Visibility into performance is increased tenfold, and decision-making made easier. There's no doubt that a company that stays on top of these issues will be stronger and more agile in the face of any crisis. Understanding its financial situation will give it a significant competitive edge.
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Stafiz is project financial management software.
Stafiz makes it possible to track all costs over the different phases of a project, and to provide management with all the information they need to facilitate project management:
- Project portfolios
- Project sales, costs and margins
- Budget progress and consumption
- Alert in case of risk of exceedance
