Best project accounting software

What is project accounting software? 

Before we talk about the best project accounting software, let's start with what actually project accounting software is.

Project accounting software is a tool which allows you to account for distinct pieces of work often referred to as a project, a job or a contract whereby actual costs and/or revenues can be measured alongside those estimated. It allows you to see how your project is performing financially so you can effectively plan. 

For organisations who run many projects or different types of projects, project accounting is often best analysed outside of the main General or Nominal Ledger. This can:

• provide more flexibility in how those projects are financially analysed 
• allow stakeholders to access finance data for the projects they work on 
• allow projects to be easily closed from the system once complete. 

Who uses Project Accounting? 

Many different types of organisations use project accounting software, including but not limited to those in professional services, health and social care, engineering, construction, non-profit and charities, marketing and communications, technology and software businesses, and sports clubs and venues.

Project accounting software is often introduced at the point when the organisation is working on multiple projects/jobs where it is becoming more paramount to accurately compare actual costs and/or margins to those budgeted. This allows the organisation to understand which of its projects are running to plan.  

Project accounting software can help organisations in different ways, for some organisations it helps controlling costs incurred against those budgeted to help prevents over expenditure, and for others it helps analysing and maximising profit margin. 

As an organisation undertakes more project work, their needs increase and so the adoption of a project accounting system, like Access Financials, is often a great way for a growing organisation to better support its financial reporting needs.   

What is the best project accounting software? 

There are many project accounting system’s out in the market but the best project accounting software for your business depends on your business needs. When looking at project accounting software, you need to consider: 

Number of active projects

Before purchasing a project accounting system, consider if your organisation needs one. If you have a few small projects, then a new system may not be right for you. However, if you have a high number of projects or your projects are quite complex, then a project accounting system would provide many benefits. 

The value of these projects

Without overstating the obvious, project accounting allows an organisation to understand its cost/revenue position for any given project at that point in time. Without it, there may be the reliance on maintaining manual spreadsheet registers that are often out of date and maybe only truly reflective following an end of month update. This means if the project costs are exceeding those expected, it may be too late to intervene and change the course of action. This can mean greater costs are incurred that cannot be recouped which then reduces the project margin. The aim of project accounting is to provide all stakeholders, and not just finance, with a real time position of the project finances. In doing so, decisions around the project delivery can be taken to mitigate such unforeseen additions. 

The stakeholders involved

As project accounting often requires the input of stakeholders outside of the immediate accounting team, ease of use and accessibilities is key within a project accounting system. Any tool that also assists operational teams with their projects will also help with user adoption. This might include managing project documents, scheduling people to work on projects or helping them to claim their expenses incurred. If you’re looking for these features, our project accounting software may be a great fit for your organisation.    

The cost of internal employees time

Project accounting often offers the facility for staff to record timesheets, which is the means of costing internal time to projects and jobs. Internal time cost can be a large contributing factor for many projects so this often fundamental, but for some it can be difficult to implement as this can lead to questions from the wider team as to why their time needs to be monitored.  

Integration with main finance system

Another sign of a good project accounting software is if it integrates with a main financial management system, so it can work in conjunction with purchase orders, supplier invoices, journals, staff expenses, timesheets as well as client invoicing. This ensures that the project accounting is always up to date and consistent with the main finance system. Our project accounting software is a feature within our main finance system, Access Financials, so you can be assured your data is always consistent. 

Accessible anytime, anywhere

With many workers working remotely, the financial data for each project needs to be accessible to staff no matter where they are working – on any device and any browser. The efficiency of your projects will run smoothly if your staff can access the data anywhere, anytime. To do this, you need to choose cloud-based software rather than desktop/on-premise software. Our project accounting software is a cloud-based product which would bring many benefits to your projects. 

You can compare the project accounting features (project costing, project billing and WIP, and project budgeting) of Access Financials to Sage 50 and XERO here.

Moving away from spreadsheets

Once you’ve chosen your project accounting software, how do you move from spreadsheets to the software? 

It is very common for organisations to account for their projects separately in spreadsheets before implementing a project accounting system. Spreadsheets are extremely flexible however it can make it difficult to compare the performance of many projects in a common and consistent manner.  

Moving to a centralised project accounting system provides a consistent framework of financial reporting and the foundation for comparative performance reporting. This sets the organisation on track to support future growth and expansion. 

It is often beneficial to seek advice from a third party who can help you evaluate and assess your current spreadsheet tools with a new approach to achieving a new consistent financial reporting structure. 

Most modern systems such as Access Financials allows for data to be uploaded and downloaded from spreadsheets which helps to move the required data into the system but also retain that flexibility for generating those ‘what if’ type reports. 

Our everything guide to switching software can help make the thought of switching finance software less daunting if you are thinking of making the change.  

How will a project accounting system help your business? 

Project accounting provides greater clarity on the financial performance of the projects that the organisation is delivering. It will help you better understand: 

• What approximate proportion of costs or revenue relates to projects and which ones? 
• Could I have avoided excessive project costs with financial visibility and planning?  
• Would margins be increased through better reporting as we deliver our projects?  
• Do we really know how our staff are being utilised and what the demand for their time is on our projects? 
• Are we effectively recharging our third-party costs to our clients where appropriate? 
• Are we billing for all our time where appropriate? 

 

For more about how project accounting can play a key role in adding value to every project read our guide on finance for project based business.  

If you'd like a quote for our project accounting software based on your needs, complete the form on this page and we’ll be in touch to discuss your business needs.