Project accounting, also known as project-based accounting, is a type of cost accounting that is used by project managers to manage the finances of each of their projects. It is a way of analyzing the projected expenses that a venture would require and measuring them against the company’s budget and estimated earnings. This process includes tracking and reporting financial results and their implications. It is most commonly implemented in engineering, government and construction industries that are involved in many projects.
Other names for a project accountant include:
- Field accountant
- Job cost accountant
- Project management accountant
- Job tracking accountant
What does a project accountant do?
A project accountant is responsible for reviewing project proposals and determining whether the initial expenditures of a project will generate sufficient long-term income to justify those expenses. Another use is to compare the projected net income of various suggested projects to determine which would be more profitable in the long-run, and therefore which projects the company should proceed with and which they should shelf. Of course, this decision is not made by the project accountant themself. Rather, the reports that they produce based on their findings will be given over to the company’s management who will then make their decisions on the basis of the project accountants reports.
Project accountants are also responsible for developing a project accounting plan to ensure that the project remains within budget and that there are no delays. They will therefore also be managing the finances of the project while it is ongoing on as well. They will be responsible for monitoring the project’s progress, managing payroll, tracking other expenditures and compiling update reports and other financial reports for the managers.
Some Tasks of a project accountant
A project accountant’s job requires many skills, and their responsibilities may vary from project to project. They will also need to be willing o travel for projects, which may last weeks or months. Below are some of the tasks that a project accountant will need to fulfill:
- Tracking billables
- Creating and updating project-accounts in the accounting system
- Projecting expenditures and projects
- Planning the schedule, resources and schedule of the project according to the allotted budget
- Investigating billing issues, coverages and other unexpected overhead costs
- Monitoring and adjusting projects based on deviations from the predicted financial estimations
- Making and submitting financial reports
- Reviewing and approving invoices, timesheets, overhead charges and all other expenditures
- Create and approve all project-related customer billings