Part 1 of 2
If projects are the primary revenue stream for a business, then careful financial management of each project is critical for the success of that business. Managing a project’s finances means much more than just focusing on its revenue, it clearly also means vigilant control of costs, along with ensuring contract terms laid-out by the client are successfully delivered on time.
Additionally, clients and other stakeholders can be very demanding in their requests to be regularly updated on the budget status of a project. Management, for example, will want to keep a close eye on ensuring the budgeted project margin is realized once the project is complete as it is the foundation of their business model. Project managers will therefore need to be able to produce detailed reports on project finances on-demand that include analysis on actual margin and profit. A project manager will therefore need to apply key techniques for ensuring target profitability is achieved. In this article, we explore several methods for protecting and maximizing profit from project estimate all the way to close out.