blog

Project Revenue & Cost Management Made Easy For Project Managers

January 31, 2024

|

Imagine a project that your enterprise is executing for an external customer. The contract has a combination of payment terms with some deliverables being fixed price, some being time & material. On top of it, projects have specific milestones that trigger these payments from the customer.

Now let us add another dimension here.

Irrespective of the value of the project, let us assume that the project needs to outsource part of the product or service to vendors – both domestic and foreign! These vendors could be existing and pre-approved or new ones that require identification, evaluation and finally appropriately engaged. Dealing with vendors include documenting appropriate payment terms and conditions and then managing them as the project progresses.

Just to get the focus back – remember that the project is to deliver a product or service which has its level of complexity. Let me not get into the dynamics of managing the project team; we will save it for another blog!

Most project managers would dread the thought of managing these contractual terms, payments, collections, and the associated documentation. While the legal and procurement teams would be available for consultation and guidance, the project managers have to ensure –

  • Customer pays for the product or service as per the contract
  • Pay the Vendor for the product or service as per the contract

Let us shift the focus to how most organizations manage projects like the one above. The project team may use the following

  • Scheduling software (e.g., Microsoft Project, Oracle Primavera, Clarity, Wrike, and so on)
  • Documentation solution (e.g., SharePoint, Documentum, Google Docs, and so on)
  • ERP solution (e.g., SAPOracle, or legacy systems)
  • Accounting software (e.g., Tally, QuickBooks, and so on)

With the software footprint mentioned above, one could imagine the pain of a project manager and his team would have to endure to deal with vendors. The project team needs to manage the schedules in one of the scheduling tools, work with procurement and accounting teams to coordinate customer collections and vendor payments. The procurement and accounting teams handle their work on different systems! So, it is not a rocket science to feel the frustrations of the project manager.

Two vital questions are:

1. How could the organization help such project managers in distress?

2. How could the firm facilitate a smooth collaboration between the project managers and the procurement or legal teams?

The solution is not to immediately do away with the existing applications and replace them with another big one. It is quite sure that the management put these systems for a good reason in the first place!

What is the way out?

Integrating customer invoicing and vendor payments into a project management solution would deliver easy and fast results. Such an integration is at the core of TouchBase® design. Let me explain.

The project manager would create a new project in TouchBase®. Along with project management dimensions such as Work Breakdown Structures, Schedules, Resources, and Budgeting, TouchBase® has the following capabilities

1. Ability to associate milestones with customer payments. The payment could be date-specific, fixed, or on the completion of a deliverable.

2. Functionality to trigger vendor purchase orders by the project team.

How do these capabilities help the project manager and team?

As the project team completes deliverables by gaining customer confirmation, TouchBase® automatically triggers an alert to the Accounts Manager that it is time to raise the invoice on the customer. Similarly, when a vendor completes his work on the project, the project manager could formally sign off with TouchBase triggering an alert to the procurement team about work completion.

The procurement team could then follow the necessary protocols for authorizing payment via TouchBase® and back to the Accounts Manager. Now, when the payments are either received or paid, data from Accounts Manager via ERP or Accounting software such as SAP, Oracle, Tally, Quickbooks is fed seamlessly into TouchBase notifying project manager and his team automatically.

With such an advanced two-way integration, project manager, and the team have the necessary information in a single window without having to check multiple systems or follow-up repeatedly with either the procurement manager or the accounts manager. Additionally, reports and dashboards are made available to highlight the aging of customers and vendors to the project team for necessary action.

It would be no wonder that project managers on TouchBase® embrace customer or vendor payment management on their projects without any qualms.

Test drive TouchBase® and explore the real world of integrated project management.

Srikanth PV

linkdin

Srikanth PV comes with two decades of global corporate and consulting background across industries with diverse roles including Strategy, Leadership, and Management. Currently, Srikanth is Head, PPM Content Management at ProductDossier focused on content management strategy aimed to empower customers create and enhance value through its flagship digital solution - TouchBase. Srikanth is also a former member of the Board of Directors of PMI Bangalore Chapter.

Subscribe to our Newsletter

We're committed to your privacy. Kytes uses the information you provide to us to contact you about our relevant content, products, and services. You may unsubscribe from these communications at any time. For more information, check out our privacy policy.