Article written by Tom Scalisi on the Viewpoint blog.
When a construction company uses its accounting department to its fullest potential, great things start to happen. Stakeholders make better decisions and risks are often identified and minimized sooner, with less effort. This means increased profits, shorter timelines, and a more well-rounded business.
But accounting teams can’t accomplish this if they’re left out of the picture. Rather than simply following behind the project management team, they need to work alongside them. We’ll identify not only the importance of aligning the accounting and project management teams but also some steps companies can take to make it happen.
The Benefits of Accounting and Project Management Synergy
Project management teams and all their members have their strengths, but so do the folks in the accounting department. Bringing these teams together creates a situation where the whole is greater than the sum of its parts.
When accounting takes a leadership role in a construction or contracting firm, risk management efficacy skyrockets. Accounting teams are able to analyze financial data and identify discrepancies, delays, and cash flow issues far sooner than the average project management team can. While the project team is fantastic at mitigating tangible risks, the accounting team excels with risks on spreadsheets and reports.
Accounting folks are always very good at ensuring decisions comply with laws and regulations. These professionals use their extreme attention to detail and regulatory knowledge to avoid costly mistakes, prepare for routine audits, and ensure that any pending changes and updates in governmental policies and regulations won’t steer the company off course.
And, when it comes to managing, predicting, and improving cash flow, accounting teams reign supreme. This entire division is devoted to debits and credits, timeframes, and reporting, so they have the best grasp on how long it takes to get paid, how much accounts payable payouts will be, and what to do with the company’s cash flow reserves.
But these benefits can only become reality if the project team welcomes accounting to the table, and the accounting division steps up to fulfill the requirements of this new job description. Mike Trammell of Forvis notes that this is part of the trick, stating companies need ”a person or persons or a team, a department that thinks how to get outside of debits and credits, how to get outside of the accounting or finance or even the treasury function and start thinking about where are we going from a long-term goals and strategy standpoint.”
6 Tips for Aligning Accounting with the Project Management Team
The benefits might be powerful, but the road to fostering the relationship between the accounting and project teams might not be well-marked. That doesn’t mean it has to be tough traveling, though. The following tips will help bring the accounting department forward to sync with the project management team.
- Hold Regular Meetings to Bolster Communication
- Set Goals to Create Trackable Progress
- Provide Training Opportunities
- Implement Company-Wide Project Management Software Use
- Compare Estimates to Actual Financials on a Weekly Basis
- Create Contract Review Workflows to Promote Clarity
Bring Accounting Forward
There are several ways to bring the accounting division alongside the project management team. And, each company is different, so the methods used may vary. However, what’s important is that construction companies do their best to bring these teams together to make better decisions, reduce risk, and keep companies growing into the future.
Read the full article on Viewpoint.com, including details on 6 tips for aligning construction project management and accounting teams.
