Stafiz is a project financial management software that adapts to your business
Visit the page dedicated to project management to find out more
Step 1
Understanding Project Financial Management Software
It is necessary to define project financial management to understand how project management software allows you to 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 project. A project financial management tool centralizes 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 data of the project at the end of the project against the initial budget. A project budget should determine how much time will be spent on the project as a whole, the costs associated with that time spent, the fees and purchases made as part of the project, and the amounts collected when that project is sold.
This data, which makes up the budget, will make it possible to analyse 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 position of projects
Once the budget has been decided, we must be able to compare the reality with this initial budget. The project financial management software makes it possible to track all project-related costs:
- Costs associated with the time spent by internal employees
- Project costs
- Purchases that have been made as part of the project
- The costs of subcontractors who contributed to the project
These costs should be recorded as they are incurred, so that the calculations of the project's financial situation 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.
Step 2
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 outcome, the project objectives must not only be achieved, but must have been implemented within the set budget. For example, if a project has achieved its objectives, but has consumed twice the budget that was planned, it is unlikely to be considered a success.
By relying on project financial management software, it is therefore possible to analyze the performance of projects. And this analysis makes it possible to define the reasons for successes or failures: which phases of projects cost more than expected? Should we change the organization to improve performance? What are the cost items that have led to 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 deviations / assist in 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 brings full visibility to managers. With this information, they can anticipate a risky situation and make the necessary decisions to correct the situation.
By knowing well enough 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 the budget level. Conversely, when a project manager only sees the situation at the end of the project without having visibility on 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 probably have to justify an accounting system adapted to this mode of operation. As part of a project follow-up, specific accounting entries need to be made.
Typically, the methodology for tracking costs and recognizing revenue for a project activity can vary. Discrepancies between project progress and invoicing also require specific accounting entries.
All of these can be automated in project financial management software. The project progress calculations, the recognition of turnover and margins, the invoices to be drawn up are elements that are directly and automatically calculated.
Step 3
The Benefits 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 detail of reporting 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:
- Project manager's portfolio-level performance
- Customer-level performance
- Team-level performance
- Performance at the level of a business unit
- …
b. Team Empowerment
By providing this visibility to the project manager, he or she is empowered. All the data is provided to him so that he can manage the performance of his projects independently. This forces managers to make better decisions, and to grow in their role
c. Correcting the course before it's too late
Project financial management makes it possible to anticipate possible risks in order to correct them before they occur. This anticipation is a major advantage, as it gives managers the means to choose among different corrective actions.
Step 4
How to choose a project financial management software?
To choose the right solution for your business, you need to establish specifications or at least a list of criteria that will allow you to filter through the different software on the market and choose the most suitable one.
a. Establish a list of criteria
To start, you need to make a list of criteria that you will review with the software that is part of your benchmark.
Here is an example of criteria/questions that you can analyze:
- What types of costs can be monitored (subcontracting, fees, internal staff, products, etc.)?
- How is turnover calculated?
- What reporting is available to a project manager?
- How is financial data consolidated (what angles of analysis)?
- How can you create a project budget
- How does the profitability analysis take into account future costs?
- …
b. Benchmark
Once your list has been established, the demos that you will make with the different selected software will allow you to confirm the answers that these programs provide to each of the points raised, and to give them a score to sort them out.
This approach will allow you to move forward in selecting the best project financial management software for your business.
Conclusion
The project financial management software therefore provides complete assistance to project managers but also to the management of companies that work in project mode.
Visibility on performance is increased tenfold, and decision-making is facilitated. It is certain that a company that retains control over these subjects will be more solid and more agile in the face of a possible crisis. Understanding their financial situation will give them a significant competitive advantage.
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Stafiz is a 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 revenue, costs and margins
- Progress and consumption of budgets
- Alert in case of risk of overshoot
