What is project accounting?
Project accounting allows companies to track all of the financial components of a project such as budgets, estimates, costs, bookings and billing. It also allows teams to see the cost, schedule, resources, and financial components of a project in one place.
A project accountant monitors the progress of projects, investigates variances, approves expenses, and ensures that project billings are issued to customers and payments collected. They may also assist with the development of the financial aspects of the business case for each proposed project.
Responsibilities will vary, but examples include:
- Maintaining project reports.
- Maintaining all relevant income and expenditure for each project.
- Analysing project expenses and providing commentary.
- Overseeing project records and contracts to ensure terms are adhered to.
- Business partnering with non-finance managers to develop processes and the understanding of financial requirements.
- Creating bespoke financial reports.
- Developing financial systems along with IT support to make processes more user friendly.
- Report on project profitability to senior management.
Why are they important?
Project accountants monitor whether a project is on track, within budget and profitable. As the role often operates on an interdepartmental basis, the project accountant is well positioned to report and track different transactions as the project proceeds across the organisation.
Skills needed for this role
Project accountants must be highly analytical with strong attention to detail. The role requires exceptional planning and project management skills, excellent oral and written communication skills, and the ability to build strong relationships.
Strategic Professional Options examinations linked to this role
Career opportunities presented by this role
The nature of project work means that these are often fixed-term roles and project accountants are often employed when a company is going through an exciting period of growth or change. There are also permanent opportunities available and career progression is good - experienced project accountants are often well positioned to progress to a financial controller or management accountant positions.
High level competencies required include:
Corporate and business reporting
A. Prepares financial statements, corporate financial and integrated reports for external stakeholders using appropriate technology.
B. Leads effective decision making through analysing, evaluating and communicating performance and position of entities.
C. Prepares financial statements for groups of entities using appropriate technologies.
D. Monitors, critically evaluates, and advises on the relevant accounting standards, regulations, conceptual and financial reporting frameworks.
A. Links developments in global trade, markets, business practices and the economic environment to required improvements in the financial and risk management of an organisation.
B. Advises on business asset valuations, capital projects and investments using appropriate analytical qualitative and quantitative techniques.
C. Identifies, evaluates and advises on alternative sources of business finance and different ways of raising finance.
D. Communicates and advises on the impact on financial decision making on current developments in regulation, governance and ethics.
E. Assesses and advises on appropriate strategies to manage business and organisational performance regarding business and finance risk and effectively communicates the impact.
Governance, risk and control
A. Evaluates organisational structures and governance to protect the long-term interests of stakeholders.
B. Recommends appropriate strategies to ensure adherence to governance structures and application of best practice internal controls.
C. Identifies and manages risk appropriately.
D. Uses risk management for the best interests of an organisation and its stakeholders.
E. Monitors and applies relevant legislation, policies and procedures.
A. Applies development and performance management, in the wider business and technological environment, within the context of strategic planning and implementation.
B. Directs organisational performance through the selection and measurement of financial and non-financial performance indicators.
C. Collaborates on the key tactical and organisational areas of budgeting and control, capital investments, people and resource management.
D. Consults on the design and use of current and emerging technology and information systems to improve strategic decision-making and organisational performance.
- Stakeholder relationship management
A. Positively develops relationships with internal and external stakeholders.
B. Communicates and gains commitment from internal and external stakeholder.
C. Uses emerging technologies to collaborate and communicate effectively with stakeholders.
D. Applies professional and ethical judgement when engaging with stakeholders.
E. Aligns organisational strategic objectives with stakeholder needs and manages expectations.
- Stakeholder relationship management
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