Is your business project based?

Project based businesses exist in many industry sectors from, professional services, creative and technology industries to construction. For these businesses, a set cost and therefore selling price does not exist, unlike a business that sells a standard product. This month’s Fintech Friday is exploring the challenges unique to these businesses and, in particular, how project management software can help.

Challenges faced by project-based companies

All projects are unique
This can make it difficult to quote for time and anticipated expenses on jobs. So, even a basic project management tool such as Xero Projects could allow you to estimate jobs and send and track acceptances of quotes.

No visibility on the profitability of an individual job
Without incorporating project management software, it can be difficult to spot a project that is making a loss. The losses of one project will be offset by the profits of another. But by allocating revenues and costs to individual projects, loss making projects can be easily identified and appropriate action can be taken.

Higher levels of uncertainty and risk
With each project being unique, there is greater uncertainty and risk involved. Project management software can enable you to mitigate that risk by having detailed up-to-date information available. This will help costs to be recovered if the unforeseen happens.

Missing out on chargeable hours/revenue
Without project management software, it can be easy to miscalculate time spent on a job resulting in that time not being recovered. Good project management software makes it easy for staff to record their time, so that all time costs are up to date and can be correctly allocated to each project.

Administration time
Managing projects effectively can be an administrative burden. Time costs, materials and expenses incurred all need to be recorded and allocated to each project. Project management software can collate all this information in one place and can automate the allocation of expenditure to projects, therefore freeing up employees to focus on other tasks.

Remote working
Especially in recent months, staff working remotely has become more of the norm. For companies that engage in project work this had already been a challenge as staff were often based at clients. The challenges of remote working can be overcome if there is a system that collates all information in one place. As modern project management software is cloud based, staff can update time and cost information from any location.

Top 5 considerations

Project management requirements vary for each company and there is software available to suit your particular needs. Here are our 5 top things to consider when choosing the right software for your business:

1. What output do you want to get from the software? This is the first question you should be asking yourself. Do you just need simple financial information on each project? Do you want to be able to raise quotes and manage leads? Or run reports on resource availability?

2. Do you need to track time? If not, a basic tool within your accounting software may be all you need. An example is Xero tracking categories, which allows you to allocate costs/revenues to a particular category.

3. Will the software integrate with my current accounting system? Ideally it will. However, if the company needs a sophisticated project management system which deals with aspects outside of accountancy, such as staff allocation, it might be that the software does not connect automatically. Some careful consideration is then needed as to how the two systems will be reconciled.

4. How much does the software cost? You should be aware that it is common now for software companies to charge a monthly subscription based on the number of ‘users’. How many staff will be using the software? If you have a large team and you want everyone to be able to submit data to the software, what initially started off as a reasonably priced monthly subscription can become quite costly.

5. Will the time and cost involved in implementing the software justify the benefits of using it? Sophisticated project management software, offering a range of multiple features may look appealing, but do you and your team have the time and skills available to implement it? Sometimes it is better to go for a simpler option that can be implemented quickly and be used to its full potential. As with all software, project management software will only be as good as the information fed into it.

Project work is a common theme for many businesses today regardless of size, sector or location. By implementing project management software to centralise information, manage budgets and billing, improve collaboration, reduce administration, save time, and maximise your resources, you can gain an overarching view of your projects, keeping you in absolute control.

How can we help?

If you would like to discuss whether your business would benefit from project management software, please contact our digital advisory team by emailing fintech@haroldsharp.co.uk or call 0161 905 1616.

We can discuss your needs and recommend a software to suit. Below are links to examples of a few of the project management software we have worked with: