According to statistics, over 70% of projects fail to meet their key objectives. This discouraging statistic is the main reason why companies decide to use project financial management software - and rightfully so.
But why are such systems considered to be so effective, and who could really benefit from them?
What is project financial management software?
Project financial management software is, by definition, any program that can provide you and your company with features for managing finances in the project in a comprehensive manner.
In other words, project financial management tools are designed to combine finances with planning, allocations and schedules to provide its users with a single source of truth for the entire project - or many projects at once.
Why is project financial management software so beneficial?
Let’s imagine a hypothetical IT company that specializes in providing its services to many customers at once and employs numerous specialists with different skills.
Every customer has its own project (or projects), with its own billing type and billing methods. Additionally, the company’s specialists do not make things easier - some of them are contractors, some are regular employees, but all of them have different wages. On top of that, the company also has its regular costs and overheads in the budget. The result is simple: it is a potential disaster waiting to happen.
Fortunately, that’s where project financial management software comes in.
Project financial management tool combines all of the information above with project schedule to provide managers and executives with a single source of up-to-date information on a daily basis. It performs necessary calculations, prepares reports, charts and tables and notifies the user of any delays, problems or mistakes.
As a result, project financial management software can:
- eliminate the mistakes and mishaps in budgeting, therefore improving it drastically,
- create accurate estimates for both entire projects and their stages,
- monitor finances in a project and notify the user about any changes, whether expected or unexpected,
- include the overheads in budgeting, making it more precise than ever,
- adjust the budgets based on the changes in wages and types of contract,
- facilitate numerous billing types for different projects,
- provide the user with accurate and up-to-date information on all the finances within the company.
By just looking at these benefits you can see why many companies decide to embrace project financial management tools. But what are the signs that you really need to do that?
When should I start using a project financial management software?
When you get lost in your own Excel spreadsheets
As a company grows, so does the spreadsheet used for budgeting. As a manager, at some point you may find yourself in an endless table that even you, the author, cannot understand. That’s one of the indicators that you need to switch to a project financial management software right away.
If you are planning to become a former user of Excel and a prospective user of project financial management tools, you will benefit from the change. That is because:
- you will not need to double check every spreadsheet for mistakes - a good project financial management software will do that for you,
- you will not have to convert the data into charts and graphs - the tool can do this for you,
- you won’t have to answer endless questions on the capacity of particular specialists; with project finance scheduling tool, other managers will know when they are available, and for how much,
- you will provide all these information to chosen managers and employees in your company, without the need to schedule a meeting to explain them,
When allocations are getting more and more unclear
If you are getting tired of endless questions on availability of your resources or their wages, project finances management tool is the right choice for you.
Project finances management programs can provide you and your colleagues with all the details for wages, absences, holidays and more, showing them exactly when they can plan to begin a new project or create an allocation. To add to that, in most of the cases such tools are capable of comparing the schedules for different projects, employees, or even contract types. It sounds better than constant questions, doesn’t it?
When managers’ meetings last forever
Meeting can be a valuable addition to your calendar, but they can also become time consuming and burdensome. If the latter option is your case, you definitely need a project finances management tool.
Such programs can successfully replace meetings meant to improve information flow within the company. Finance management platforms are updated in the real time and contain information from all the teams, managers and employees. As a result, they act as the single source of truth your business will ever need.
When you are not sure how profitable your projects are
Budgets consist of numerous factors, and sometimes it is hard to take them all into consideration - at least when you perform all the calculations manually.
However, with a project finances management software, you do not need to worry about counting the numbers on your own.
Such platforms include numerous intuitive budgeting tools, including:
- advanced and/or custom reports,
- real-time updates,
- automatically refreshed tables, charts and graphs,
- budgets for particular projects and their phases,
…and more. As a result, your calculator will soon be covered with dust - project finances management tool will replace it in an instant.
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