Sydney-based Business Advisory and Financial Project Management Consultancy

Managing your project profitability

Managing your project profitability

Profit is the goal of every business. Earning enough revenue to cover your costs will ensure that the lights stay on, but without profit, your business will never be able to grow and prosper. The most successful businesses don’t wait until after a project is complete to measure profit either. They know that ensuring a project turns a profit requires vigilance and understanding every step of the way, and a Financial Project Management System is crucial for achieving this.

A Financial Project Management System can give you the visibility you need to monitor the profitability of every phase in a project. By breaking down one job into a series of milestones, each with its own respective cost and timeline, you can know exactly when something is over budget. This process lets you step in immediately to make corrections or adjustments to get the project back on budget.

” You get a clear view of where employees are spending the majority of their time and how to better organise your team “

Better organised teams

Additionally, tracking the time and cost of every input gives you a clear view of where employees are spending the majority of their time and helps you to understand how your teams could be better organised. For instance, one of your employees at your consulting firm may excel at customer service while struggling with research. An issue like this might become clear when reviewing timesheets for the week. With this knowledge, you could reassign the employee to a different task or even hire a temporary contractor that might cost less.

Accurate quotes

Accurate quotes are another key component in maintaining a project’s profitability. If you quoted a customer one price only to learn that your past projects have cost twice as much, your project is not likely to be profitable. A Financial Project Management System would allow you to go back and view all the past projects that are like the new pitch and discern the right cost before you ever send the quote. After that, make sure you manage the new project the same way, and you can stay on time and on budget. You could even see which employees and vendors are best for the job.

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Valuable reporting and analytics for your business

The biggest impact on profitably is reporting and analytics. Going back and looking at past projects will give you a good idea of what you should quote for a new project, but a Financial Project Management System lets you do so much more. You could average the jobs over time, learn which employees are best at which jobs, compare vendors across projects, and estimate costs against any number of variables like seasonality or something unique to your industry.

Profitability is a major concern for businesses both large and small. The best way to increase profitability is through clear visibility into your business’s financial operations. And this visibility is best accomplished with a Financial Project Management System such as WorkflowMax, which provides critical insight into your small business operations. At Red Arrow Consulting, we provide you with an experienced business consultant certified to help implement and integrate the system into your business.

 

References:

What is a financial project management system?

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