Project-based businesses depend on project accounting software to keep track of expenses and revenue associated with each project. Businesses that offer their services by contract, such as IT firms, professional services firms, and engineering firms benefit from project accounting software because the program organizes the data more efficiently than simpler methods. Small businesses with few projects may be able to rely on more basic accounting programs, but as the number of projects increases, it becomes necessary to use adequate software that matches the scale of the work.
Project accounting software differs from project management software in certain key aspects. Accounting software focuses specifically on the money coming in and out related to the business’s projects. Management software is more comprehensive, managing tasks, deadlines, and resources. However, many project accounting software includes some basic project management tools as the accounting is impossible to completely separate from the timelines and milestones of the project.
Project accounting software makes billing, invoicing, and receipts of payment more efficient. The software tracks employee time so an employee can spend his or her time working on a variety of projects and bill each project separately by entering this data into the program. In addition, any expenses that the business accrues in its work on a project are simply entered into the program, which does the necessary calculations for billing. The project accounting software can generate the invoices automatically, so billing clients becomes a streamlined process that takes into account the work in progress. Having the software track expenses and revenue throughout the project makes it easier at the end of the project, because it is not necessary to go back and calculate all past expenses and employee time.
If you are looking for the right project accounting software for your business, there are some things you should consider. You should look at all the features to ensure that it contains the components that you need. Also, it is helpful to practice using it to check out the interface and make sure it is accessible and easy to navigate. If your employees work out of the office, you want to be sure that they can bill their time remotely, either from mobile devices or the internet. If you do not have separate project management software that you use, you may want to buy project accounting software that includes project management elements to help you organize your work.