Project accounting
Project accounting is the tracking of income and costs per project: budget or estimate, hours and purchases incurred, amount invoiced and the expected result when the project is finished.
Also known as: project economics, project cost control, prosjektøkonomi
A project has its own economics inside the company's accounts. The cost side is the company's own hours, materials, purchases and subcontractors; the income side is the contract sum, change orders and extras. Good project accounting means the figures are up to date while the project is running, not only in the post-project costing. Typical measures are incurred versus budget, invoiced versus earned, contribution margin and a forecast of the final result. The most common problem is that the figures sit in different systems: hours in a timesheet tool, purchases in the ERP, invoices in the accounting system and the estimate in a spreadsheet. Then project accounting is never more current than the last manual consolidation.
Read more in the in-depth article on this topic.
Related terms
- Post-project costing (estimate vs actual) — Post-project costing compares what a project or order actually cost with the estimate the quote was based on.
- Billable utilisation — Billable utilisation is the share of working hours invoiced to customers, calculated as billable hours divided by the total hours logged.
- API integration — An API integration connects two systems through their programming interfaces (APIs), so data flows between them automatically instead of being typed in twice.