Stafiz is project financial management software that adapts to your business
Visit the page dedicated to project management to find out more
Step 1
Understand what financial project management software is
It is necessary to define project financial management to understand how project management software allows you to improve the efficiency and performance of your activity.
a. Centralization of project data and financial consolidation
When a company operates in project mode, its performance is determined by the sum of the performances of each of the projects. A project financial management tool makes it possible to centralize all project financial data. In 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 compared to the initial budget. A project budget should determine the time to be spent by all resources on the project, the costs associated with that time spent, the fees and purchases made on the project, and the amounts collected when that project is sold.
This data which constitutes the budget will make it possible to analyze the financial performance of the 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 subtask on the project.
c. Calculations of the financial situation of projects
Once the budget is finalized, you must be able to compare reality with this initial budget. Project financial management software makes it possible to track all project-related costs:
- Costs associated with time spent by internal collaborators
- Costs related to project fees
- Purchases that were made as part of the project
- Costs of subcontractors who contributed to the project
These costs should be recorded as they are incurred, so that the project's financial position calculations are correctly reported
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.
2nd step
Why use project financial management software?
Here are the top 3 reasons to use project management software:
a. Track project costs and profitability
The reporting associated with projects makes it easier to manage. For a project to have a positive result, not only must the project objectives be achieved, but they must also have been executed within the set budget. For example, if a project achieved its objectives but consumed twice as much budget as planned, it likely cannot be considered a success.
By relying on project financial management software, it is therefore possible to analyze project performance. And this analysis makes it possible to define the reasons for success or failure: which phases of the projects cost more than expected? Should the organization be modified to improve performance? What cost items caused a deviation from the budget?
This management control makes it possible to better assess the reasons for the successes and failures of projects and to draw the necessary conclusions to promote continuous improvement.
b. Anticipate gaps / help with decision-making
Project managers must be supported in the management of 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 provides full visibility to managers. Thanks to this information, they can anticipate a risky situation and make the necessary decisions to correct the situation.
By knowing well in advance the risks of cost overruns, as well as the risks of project delays, corrective actions can be taken to restore the situation. By anticipating risks, project managers have a very high probability of returning to budget level. Conversely, when a project manager only notices the situation at the end of the project without having visibility into the risks at completion, it is often already too late to be able to improve performance.
c. Prepare accounting entries
An activity that operates in project mode will likely have to provide accounting adapted to this mode of operation. As part of project monitoring, specific accounting entries need to be made.
Typically, the methodology for tracking costs and recognizing revenue for a project activity can vary. Discrepancies between the progress of the project and invoicing also require specific accounting entries to be made.
All of these elements can be automated in project financial management software. Project progress calculations, recognition of turnover and margins, invoices to be established are elements directly and automatically calculated.
Step 3
The advantages of financial management software
There are 3 main benefits to using financial management software:
a. Reporting allows you to gain visibility
First of all, the gain in visibility makes it possible to know the situation and the performance of the activity. When the level of reporting detail is at the project level, a set of major information is provided to managers. This visibility allows them to improve each project, but also to have information on the portfolio of projects for which they are responsible.
Indeed, the management software makes it possible to consolidate data at different levels to provide a complete analysis:
- Portfolio-level performance of a project manager
- Customer-level performance
- Team-level performance
- Performance at the business unit level
- …
b. Team accountability
By providing this visibility to the project manager, he is empowered. All data is provided to him so that he can manage the performance of his projects in complete autonomy. This forces managers to make better decisions and grow in their roles.
c. Correct the situation before it's too late
Financial project management makes it possible to anticipate possible risks to correct them before they occur. This anticipation is a major advantage, because it gives managers the means to choose among different corrective actions.
Step 4
How to choose financial project management software?
To choose the solution that suits your activity, you need to establish specifications or at least a list of criteria allowing you to filter among the different software on the market and choose the one that is most suitable.
a. Establish a list of criteria
To begin, you must establish the list of criteria that you will review with the software that is part of your benchmark.
Here is an example of criteria/questions you can analyze:
- What types of costs can be tracked (subcontracting, costs, internal staff, products, etc.)?
- How is turnover calculated?
- What reporting is available to a project manager?
- How are financial data consolidated (what angles of analysis)?
- How to create a project budget
- How does profitability analysis take into account future costs?
- …
b. Perform the benchmark
Once your list has been established, the demos that you will carry out with the different software selected will allow you to confirm the answers that this software provides to each of the points raised, and to give them a score to sort them.
This approach will allow you to move forward in selecting the project financial management software best suited to your activity.
Final thoughts
Project financial management software therefore provides comprehensive assistance to project managers but also to the management of companies working in project mode.
Visibility on performance is increased tenfold, and decision-making is facilitated. It is certain that a company that maintains control over these subjects will be stronger and more agile in the face of a possible crisis. Understanding your financial situation will give you a significant competitive advantage.
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Stafiz is project financial management software.
Stafiz makes it possible to monitor all costs over the different project phases, and to provide management with all the information to facilitate project management:
- Project portfolios
- Project turnover, costs and margins
- Progress and consumption of budgets
- Alert in case of risk of overrun
