So, you’ve got an exciting new venture on the go, and someone has suggested you take on a project accountant to help ensure things run smoothly. But now you’re left asking the question: what exactly does a project accountant do?
Well, there are a few clues in the name. A project accountant is a qualified accounting professional brought on for the duration of a specific project. He or she should offer your company the financial insight you need to ensure that your project meets its objectives and timelines. But they should also be able to offer professional insight into the focus of the project itself.
Embarking on a merger or acquisition? Your project accountant should ideally have experienced the ins and outs of a similar endeavour. Looking to expand a product line? He or she should have some insight into similar marketing-related projects.
On an operational level, your project accountant should be fulfilling several mandates. Below is a checklist of things he or she should be doing. Use this to ensure that your company is getting the most from your project accounting professional.
- Systems and record maintenance: Your project accountant should create and maintain project accounts in your company’s accounting system. They should keep track of contracts that are entered into related to the account, and ensure that orders are changed on the system as this takes place in real time. This means, of course, that he or she should be au fait with your company’s accounting software. This should be a key consideration when taking on someone new in the role.
- Hold the keys to the project accounts: A project accountant need not be a top executive, but you should be able to trust them enough to ‘hold the keys’ to the accounts related to the project. Your project accountant is the person who will authorize access to project accounts (for other accountants assigned to the project, or executives wishing to access expense tracking). Perhaps more importantly, it’s the project accountant who will authorize the transfer of expenses into and out of project-related accounts. If you need more money to pay for an unexpected capital outlay, they will decide whether to pull that money from the marketing budget or the research and development department, for example. It’s ultimately up to him or her to decide where the money is needed best and how the budget allocated to a project can be optimized.
- Oversee supplier expenses: A project accountant needs to review and approve what suppliers intend to charge for goods or services related to a project. In the stories that frequently make news headlines, where government departments grossly overpay for goods or services provided, procurement officers and the politicians heading the department often get the rap. Of course, these people play their part in the equation, but instances like this could also be avoided if there is a good project accountant overseeing the job.
- Similarly, the project accountant needs to review the time being billed for a project. If contractors are being overly liberal with their time claims or purposefully dragging out a project in the hope of higher reimbursement, a good project accountant should pick this up and flag it.
- Your project account should also be overseeing and approving overhead charges, and reviewing account totals related to project assets and expenses.
- Monitor expenses: An important part of your project accountant’s role is, of course, to ensure that expenses stay on track. He or she is responsible for investigating project variances, where projected costs and actual costs differ. They are required to timeously submit variance reports to management.
In addition, your project accountant should report on project profitability to management, and flag any potential areas where extra expenses might be incurred. They should keep management updated regarding the remaining funding available for the project, so that those nasty end-of-project surprises are avoided entirely.
- Oversee customer billing: The incumbent should create and/or approve all project-related billings to customers. (Whether or not they create the bill themselves depends on the size of the project and the level of administrators assigned to it). Along with this, they need to investigate ‘billing’ issues – interrogate why bills aren’t paid, and approve the write off of any project-related billings that cannot be billed to or collected from customers
- All project-related financial admin: Your project accountant is also responsible for creating and submitting all the government reports and tax returns related to the projects. If the project undergoes external auditing, your project accountant should compile information for both internal and external auditors, as required. Essentially, the buck stops with him or her when it comes to financial reckoning for the venture.
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