Project Financial Management

Many Project Managers’ may be weak or need more background and understanding of Financial Management. The well-attended breakfast roundtable meeting discussed the importance and challenges of Project Financial Management.

At the onset there was a clear distinction between contracted project work vs. internal project work. Unit of measure may differ along with time tracking and the use of average rates as a substitute for actual dollars. In either case, contract or internal, each project manager should think ahead on how the project is to be tracked and ensure that the WBS has enough granularity to support the calculations and that a change management process is in place to feed the WBS for accurate project forecasting. 

Since Project Financial Management is such a vast topic the following are other areas that thisbreakfast roundtable meeting touched upon:

Job costing, Earned Value, Internal Finance Reporting Hierarchy (often not at project level), Project Manager financial accountability, Direct vs. Indirect Costs, role of the Project Office, Contract Terms and impact on billing, the use of PMI workproducts and training Project Managers in the tools and techniques in Financial Project Management.