Finance teams need to stay on top of projects to ensure they don’t go over budget, and for that reason, they often become integral stakeholders during projects that might not fall under their purview. Everything from HR (in terms of hiring budgets) to R&D (what upgrades to an existing product can be funded quarterly and yearly) likely will need the finance team involved in some way in the project management process.
Therefore, it’s essential to understand what’s going on and what the numbers are so that the entire company’s balance sheets aren’t thrown out of whack. With that, here are some tips for what to focus on for finance teams involved in aspects of project management.
Figure Out How to Track and Communicate Effectively
Finance team members and those directly involved in project management need to have tools at their disposal that can track progress. There also needs to be formalized lines of communication that are easy to access for all team members and stakeholders. Whether it is a Slack channel or some other dedicated communication platform, finance teams need to be able to stay in the loop on a project’s progress, understand where the project is from a financial standpoint, and be able to know who to reach out to and how to reach them if there are any discrepancies.
Many companies leverage technology such as Trello, Monday, Jira, Asana, Evernote Business, ClickUp, or others to track projects. Figure out what works for your team, and then make sure it is used religiously to track projects accurately and up-to-the-minute. This will allow you to understand better exactly where a project stands at any given time.
Pick Your Metrics Wisely. Then, Check Them
If you’re using project management software, it’s good to take advantage of the data you’re given. Alternatively, you’ll need to create your dashboard and carefully track the KPIs that will help your team and stakeholders understand where the project is concerning the budget.
While KPIs can be super-useful, having too few won’t give you any insights, and having too many will dilute their overall effectiveness. For example, if you only follow revenues, you may miss low-profit margins. However, if you instead focus on profit, you may overlook revenue. Therefore, stick to 2-3 high-level data points and follow them religiously. Many company finance departments, when looking at the company as a whole, prefer to focus on:
- Profit
- Budget vs. actual
- Earned value
However, smaller, more focused projects may need more specific metrics that make sense in terms of the project’s scope.
Whatever your metrics, they won’t mean anything if you don’t watch them regularly. By focusing on the KPIs, you’ll be able to note scope creep, for example, or tell if too many resources are being directed at a project that won’t have a significant monetary payoff. By watching where the time and energy (and money) are going, you can help projects stay within agreed parameters and protect the company from ballooning expenses.
Get Into a Daily Routine
Reports and dashboards only work if the data behind them is timely and accurate. For example, if you have entire teams capturing time at the end of the week (instead of daily, hourly, or in 15-minute blocks), you could miss massive swings in costs depending on the size of the project. At the beginning of a new project, it’s good to get agreements from all involved teams and departments and make them adhere to stringent time capture. Even better, doing what you can to implement a solution that can automate the process will help make everything more efficient and take the onus away from individuals.
Don’t Let High Performers Cut Corners
Similarly, often, companies will have high performers in various areas, and, due to their value to the firm, will allow them to cut corners here and there. In finance, that might mean cutting a manager or executive slack when it comes to getting receipts handed over or hours logged into a system. However, it’s essential to morale and the project in general that everyone gets treated with a certain level of equality and that expectations are followed across the board. Work with management to create a top-down approach to work ethic and stress the importance of timely financial information.
Challenge Yourself and Your Team
By putting tools into place that help the finance department track budgets, keeping lines of communication open, and being clear about expectations, you’re creating a kind-of paper trail that can show off where your team is excelling and where processes can still be refined. By starting projects with clear goals, tracking specific KPIs, and not letting anyone off the hook for lazy accounting, you can challenge yourself and your team to build projects that come in (or under) budget and on time. Having the space to review processes after each project will also help you pinpoint areas of improvement. As projects progress, your approaches can more easily meet the moment and use lessons learned to help dodge bullets in the future.
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