Project management typically involves initiating, planning, budgeting, executing, and completing a set of tasks to achieve specified goals. The success of a project relies on timely completion using nothing more than the allotted resources.
Time and resource issues frequently come up during the life of a project. However, the ability of your team to optimize outputs in a cost effective manner influences the project most.
This is only possible if all resources and expenses are tracked in real-time. It’s easier said than done. Project managers experience a lot of trouble tracking the costs and resource consumption.
An effective system must be put in place to tracking and recording purposes.
Detailing reasons of actual costs and resource tracking
Depending on a specific project and/or business environment, you may need expense tracking because:
- Financial and managing accounting systems require complete and accurate documentation for the final cost of the project. It’s even more important if your organization needs to report cost to other partners.
- To the internal revenue services, justifying tax write-offs
- To an external project customer, justifying project fees
Your company may also need expense tracking to estimate the cost of executing an initiative or measuring profitability of the project for an outside customer.
- Effective cost control can only be achieved during the project by having complete information about the actual to date. Budgeting estimated costs by activity and relevant costs can equip a project manager to support cost controls on their part.
Comparing the costs-to-date at any point against the budgeted costs will enable you to stay informed about cost variance. You can take corrective actions to reduce negative variance in a timely manner.
Moreover, budgeted costs for the remaining activities can be adjusted to develop a new estimate for total project cost.
- Tracking actuals lets you build a historical database to support budgeting and resource planning for future projects. This database has more value if your organization works on numerous projects similar to the one in progress.
Tracking actual may not be necessary for every project undertaken by your company. However, when required, it’s important to have an easy to use system established for expense tracking.
Furthermore, you must take all the technical and procedural steps that should be implemented for accurate and timely execution. An easy way to do this is to opt for the ready-to-use, excel dashboard template for project expense tracking provided by Adnia Solutions.
This easy to use template will allow you to quickly enter data, analyze it and record the information for future reference. Track expenses by category, supplier and team member for improved organization and analysis.