Project Based Cost Management for Small Businesses

Project based cost management can prove to be more effective for a small business. Whether it is about budget management, scheduling, cost control or resource allocation, cost management at the project level is effective at multiple levels for the following reasons:

• Provides better resource planning and allocation.
• Cost accounting is easier to handle; more accurate.
• Streamlines multiple project activities.
• Develops better resource estimates.

Areas at the project level that can be included in the cost management plan include:

Tracking information

At the project level, this includes keeping track of tasks within the projected deadline.

• Keeping track of time and not allowing projects to overshoot helps with keeping costs controlled.
• Tracking the deadline also helps in optimal resource utilization.
• Handling issues and risks better, as you may get enough time to act.

Budgets and forecasting

• Ensure you are able to track and measure performance.
• Cost management involves being able to manage budgets for multiple projects, including those being executed in different geographical locations, using diverse currency, etc.
• Ensure cash flow forecasts are maintained.
• Take stock of performance to be applied to forecasting.
• In the case of geographic diversity, your plan may need to include currency changes and fluctuations to ensure that costs remain within budget and do not overshoot.

Tracking expenses

For cost management to be effective, you need to track the actual expense.

• Account for actual costs and hours as estimated.
• Match expenses as planned or estimated with actual figures.
• If you are maintaining time sheets for different tasks, make sure these are integrated to give you the accurate figure.
• In case of any change at any point, your plan should contain reporting that includes records of these changes, appropriate notifications and concurrent linking with any ongoing deliverable/order.

Manage project contracts; track performance

You can only keep costs within expectations and budgets controlled if you keep within the contract or enforce contract terms and conditions.

• Tracking changes, if any, and incorporating them into the contract for ongoing work.
• If needed, adopt flexible rules to ensure contract requirements are met; this could include allowing remote work, etc.
• Keep track of performance on the project, in terms of status both for time and budget, KPIs, and other goals and standards pre-decided for the project.

Analytix routinely helps with cost management plans at the project level. We aid with estimation, scheduling, forecasting and planning to ensure small businesses adhere to their budgets while ensuring profitability.

For more information on our services, please visit us at https://www.analytixaccounting.com or email us at sales@analytix.com.

Written by

Analytix Editorial Team