Posts Tagged "project cost tracking"

Variance analysis is a key statistical tool used in operational and financial data for project management. Integral to ensuring short-term as well as long-term success of projects, variance analysis allows an organization to pinpoint risks, opportunities, patterns, issues and areas of improvement in the way a project is functioning.

So what is variance analysis anyway? Simply put, it is the difference between the planned and actual finances. Efficient project cost tracking often employ variance analysis to help managers in their project budgeting efforts. The quantitative financial data are evaluated using variance analysis at regular intervals to determine where the project is headed in terms of costing and profitability.

SolutionCorp closely integrates variance analysis into its project budgeting and project cost tracking software, giving managers the power to track the difference between their planned and actual expenditures at every step.

In fact, the project performance module of the software employs variance analysis to deliver key metrics about the status of various projects. The manager can find a summarized performance reporting for each of their projects in this module. This reporting will cover financial summaries of project as well as that of labor working on the project, since labor costs are an essential part of the overall project budgeting.

The project summary will showcase project name, customer name, current project status, planned and actual billing, expenses, labor, overhead costs, total costs, revenue, profit and profit percentage, and variance between these planned and actual parameters.

On the other hand, the labor summary will consist of departments working, activities performed, planned hours and costs, actually spent hours and costs, and finally the variance calculation between the planned and actual hours and costs.

Such a comprehensive overview of the project performance with variance analysis will empower managers with concrete financial data analysis results for making informed decisions for the future.

One of the most important objectives for any organization is to avoid budget overruns in their projects. Stakeholders only want to invest time and energy in projects that are profitable, and the risks of project costs running over the board can seriously hamper the project profitability. SolutionCorp’s project software offers plenty of project budgeting options to keep the project costs organized, accounted for, and most importantly under control. The project cost tracking of the software enables the managers to keep close track of the costs incurred in the project by various related activities and employees at every phase.

Some of the key functionalities offered by SolutionCorp’s project budgeting and project cost tracking modules are:

  • Organize the project costs into different phases of the project so that the project budgeting requirements and expenditures of each phase are clearly outlined.
  • Plan the expected costs for labor, equipment and other overhead expenses in advance.
  • Calculate and track the actual costs that are incurred for labor, equipment and overhead expenses, and thus monitor the variance occurring between the planned and actual costs.
  • Get reporting of project expenses by expense code. Using parameters like project, expense, customer, account director and project manager, user can retrieve a report on expenses for a given time period.
  • An expense entry system where a user can input and save expense details like date of expense, project name, expense type, expense description, invoice id, cost, employee by whom expense is incurred, etc.

The project time and expense system by SolutionCorp is smartly designed to help managers bridge the gap between the expectations and reality of their project expenses. It is only when this happens that the annoying problem of project budget overruns can be successfully avoided and the project can meet its profitability goals and criteria.

You can have the best of ideas for your client’s project, but if you’re unable to optimize and deliver them within the client’s budget constraints, prepare to come under fire. Effective project budgeting is one of the most important cornerstones in the success of a project as viewed from the perspective of a client. Here are 3 reasons why project cost tracking should be a top priority for you:

  1. Set Cost Controls as Necessary

Tracking project costs will allow you to ensure that the project is not running out of its original scope. All tasks performed for the project and costs incurred by them should remain in compliance with the initially forecasted budget, so that there are no glaring differences between estimated costs and actual costs. You can set up controls before the costs get out of hand.

  1. Improve Project Profitability

Imagine proudly showcasing to your client what great returns the project is offering, and then revealing to them sheepishly that the project costs incurred are just about close enough to the returns. You’ve just told your client that their profit margin has been reduced to nothing. Smart project budgeting and planning will never put you in such an awkward position.

  1. Win Client Trust for Long-Term

Ever wondered why some businesses run successfully for years and why some fail and burn out within a short time? The big secret is nothing but the client satisfaction and trust that some businesses are able to accumulate and sustain through their reliable working ethics. Your clients will collaborate with you a second time only when they can trust you enough to stick to the planned budget. Simple project cost tracking for a client may eventually help you establish a long-term good relationship with the client.

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