Are you making or losing money on your projects?
Are you making or losing money on your projects? Do you know? Each time you bid a project, are you confident in your estimate, or is it a "best guess"? If your business performs jobs for customers, you need to track profitability by project. Otherwise you're just gambling. And even if your business is not a project based organization, project accounting software may be useful for you. Here are some key factors to determine if project accounting software is appropriate for you, and what type of project ERP solution you might want: How many projects do you have per year, and what is the typical duration? If you do not have very many, or the tasks tend to be long in duration, you may do just fine by simply using a separate GL account for each project. But if you have many projects, and especially many short ones, your General Ledger will quickly become overrun with specific codes and thus unmanageable. Would you want revenue recognition information more often than once a year? In that case, software that automates the brake pad suppliers calculation of WIP and revenue recognition based on activities may save you a lot of time. Do you need to track labor costs by task? A primary capability of all project accounting software is the ability to allocate labor hours and costs by job. Without this capability, trying to allocate labor charges manually after the fact can be extremely inefficient. Appropriate project management software will save you quite a lot in tracking labor charges. Do you need to track costs and/or revenues by activity? Many organizations don't consider themselves to be "project" based, but still want to track costs and/or revenues by something -- perhaps you want to track costs by grant code, or by geography. Project accounting is just as beneficial for internal tracking as for client centered activities, especially the project accounting elements that make up larger ERP or MRP software solutions. Of course, there are many other features of project accounting or ERP solutions, but these issues are often the deciding factors. Any project ERP software package can show you whether you are making a profit, and help you quote intelligently so you can make as much money as possible. Find the project accounting software package that is best for you and get going!