Nobody would deny that finance teams play a vital role in any business, and your insights drive decision-making at every level. However, that doesn’t stop some people viewing you as a back-office function, or cost centre, only responsible for transactional tasks. As long as clients pay on time, the business is doing well and wages are paid, employees may have little interaction with your department.

But imagine if you were able to automate the transactional tasks and work with your colleagues across the business to deliver insights that reduce costs and improve project profitability? Let’s us look at some of the challenges of running project and how software can help provide the solution.

Challenge 1: Managing costs & maintaining cash flow

How much will this project cost to deliver and can we maintain positive cashflow?

In the race to win new business, it’s easy to under-estimate the true cost of delivering a project. As deadlines loom, managers may have no choice but to ask staff to put in extra unbilled hours, which means they cannot undertake other client work during this time. Alternatively, they could enlist contractors or freelancers and absorb the costs. Working in finance, you’ll know that, in both cases, inaccurate estimates limit profits. On top of that, there is the constant worry that clients won’t pay on time so your cashflow suffers and the firm won’t be able to pay staff or suppliers. After a turbulent year, when Covid-19 derailed many businesses, it’s not surprise that increasing cashflow is now a priority for 48% of CFOs, while reducing costs is a priority for 57%.

Read ‘Tips to drive growth for Professional Services in 2023’ for more insights into growing your business.

The solution

The benefit of using a project accounting software is that access can be granted to a range of stakeholders in different departments. As a result, project teams can easily view the information they need, without asking finance, freeing your team up to concentrate on maintaining positive cashflow. However, greater visibility does not compromise security, since you can set different permissions to protect sensitive data.

Of course, staying on top of cashflow is far easier when you have the right financial management software in place to apply multiple billing types for a project, such as work-in-progress (WIP) and project milestones.

A time-lag in financial reporting is one reason why you might not notice over-spending until you’re heading towards negative cashflow. However, with real-time financial data (such as budget vs. actuals), you’ll quickly spot problems as well as opportunities to increase revenue (e.g. cross-selling or upselling). Better still is if your finance software integrates with other systems via a company-wide central platform because it provides a single version of the truth, rather than disparate, incomplete or even conflicting data sets.

Our blog, The right financial management software for Professional Services firms, is a great resource for weighing up your options.

Challenge 2: Are your suppliers delivering value for money?

Project-based businesses depend on suppliers, whether it be print companies, web developers or software services. Yet supplier costs can creep up over time and you don’t always realise until it’s too late.

The Solution

Without a game-plan for procurement, you put the commercial viability of projects at risk. But you can keep your supplier bill in check using finance software to achieve complete visibility of the procurement process and set automated budget checks and approval alerts for purchases and invoices. An interactive scheduling tool also helps you stay in control of spending, as it allows you to book resources in line with the statement of work.

Last but not least, storing all your supplier agreement and purchase history electronically means you’re able to review your suppliers, check the figures stack up and strike a better deal with them if necessary.

Challenge 3: Are you getting the most from your staff?

Employees are a business’ most important resource and biggest expense – so how do you know if their capabilities are being channelled in the right areas? Juniors may be working long hours because they lack the skills to work efficiently and productively, while your top players could be spending too much on low value work.

It’s time to turn the tables on poor resource allocation, which often causes performance, innovation and employee mental health to suffer, which ultimately impacts the bottom line.

The Productivity Commission estimates mental illness costs the Australian economy between $200 billion and $220 billion a year, which equates to almost 10 per cent of our national GDP. The research shows that workplaces account for between $15.8 and $17.4 billion dollars of that cost.

Solution 3

With the benefits of cloud-based workforce management software, employees can record their hours with online time sheets, on-the-go and from any device – which means you get an accurate and up-to-date view of work-in progress and how much income has been accrued. A resource planner, automatically populated with timesheet information, can also be fed into your finance system, reducing the chance of errors due to double-keying data and manual calculations.

From this, creating WIP reports based on metrics, such as cost to complete or time to complete, is straightforward. Project managers can easily view this information via their own system, enabling them to make fast and effective resourcing decisions that improve project performance without sending endless emails to finance.

The result? Better workforce planning that allocates staff in line with the demands of the project, reduced stress and ensures top fee-earners are not spending too much time on low margin work.

What next?

When finance has the time and technology to develop a game-plan, you can help your team achieve more, from securing new business to increasing margins on projects.

Instead of rolling the dice, and hoping that every project will deliver value, it’s time to leverage your expertise to get on top of hidden costs and provide evidence for better decision-making. When you have up-to-the-minute insights, you’re no longer looking backwards but forwards towards the finish.

It’s easy to compare business with strategy games – there’s the thrill of achieving your goal, with risks and rewards along the way. However, the big difference is that the decisions you make in business impact real jobs and lives. Getting your projects over the line, and staying ahead of your competitors, depends on the insights you gain when you streamline transactional processes and team up with other experts in the business.

Click here to find out more about Access Financials Accounting Software for Professional Services or our financial system Access Financials.