Project Financial Management and financial control is an area that many companies under-emphasize.  Especially those that are not familiar with project cost control management methods.  To do this well requires a fusion between the Company’s Accounting organization and the Project Manager or Practice Leader for the project(s) that need to be controlled.  I have seen many situations where companies have failed to effectively plan for solid control, and ended up spending far more or making far less on their project(s) than anticipated.   Often this is because the company did not consider (or failed to recognize) that the project(s) would require a different control method than what they were familiar with. An established US Law Firm with diversified practice areas will serve as our example for this post. The firm does most of its work on a T&M (time and materials) basis.  That is, the firm’s attorneys accrue hours and expenses doing work for its clients, and typically bills clients on a monthly basis for all hours and “costs” of the work expended during the prior period.  This continues on a month to month basis.    The firm’s Accounting Department is used to this type of billing arrangement.  They know to accumulate … Continue reading Project Financial Management