The project accounting software market is extremely complex. With such a large number of vendors, products, and vertical industries in the space, it can be overwhelming to look for the right solution without some guidance. Specific reporting capabilities, simultaneous project support, and other optional functions also need to be considered. As the list of variables go on, the selection process only gets more difficult. We wrote this guide to help buyers with these questions.
Here’s what we’ll cover:
What is Project Accounting Software?
Project accounting software helps track relevant data for projects carried out by an organization. The systems can help pinpoint what makes a project profitable, how workflow can be improved, and how costs can be minimized. Several different industries have project-based work schedules. These include law, engineering, software development, advertising, and construction.
Project accounting software ensures financial responsibility by comparing expenses to project budgets. If costs begin to exceed expectations, automatic alerts can help team members correct the error as soon as possible. Project accounting software can often be combined with other applications such as project billing software and project management software. The ideal project solution varies by industry or project size.
Different organizations have different priorities and requirements in finding the right system. Here are the main categories of software buyers:
- Enterprise buyer: These buyers work for organizations that have invested in or are considering an enterprise resource planning (ERP) suite. They value complete integration across all departments and units. They typically purchase project from ERP software companies.
- Industry-focused buyer: These buyers usually have specific billing methods in mind when they are considering software. For example, construction companies and consulting firms likely need to evaluate systems with different billing methods.
- Small business buyer: Buyers from smaller organizations should make sure to limit their consideration to systems aimed at their size and workflow requirements.
The software vendor landscape is always changing. Different buyer types should examine groups of systems specific to their preferences and needs.
|This type of buyer...||Should evaluate these systems|
|Enterprise buyer||Microsoft Dynamics AX, Epicor Financial Management, SAP|
|Industry-focused buyer||Microsoft Dynamics NAV, Microsoft Dynamics SL, Sage Accpac, Sage MIP Fund Accounting, FastFund Nonprofit, Vertex Financial Manager, Deltek Vision, Lawson S3 Financial Management|
|Small business buyer||Microsoft Dynamics SL, SAP Business One, Intacct Financials, Sage MAS 500, Sage Pro ERP, Sage MAS 90/200|
Market Trends You Should Understand
- Increased vertical specialization. Over time, project accounting software has become increasingly specialized on vertical industries, adding value according to unique workflow types. Systems are catering to the specific needs of engineering firms, law firms, nonprofits, construction companies, and others. Make sure to keep this in mind when evaluating systems.
- Globalization. As with many different enterprise resource planning (ERP) systems, it is often critical to support the demands of international business. This includes the ability to store information on multiple currency types and multiple different business entities.
- Software as a Service (SaaS). SaaS is lowering costs and speeding up implementation for buyers by offering web-based software hosted by the software company. Billing is structured as a monthly fee, rather than a large up-front investment; as a result, many more companies are able to afford system earlier.
- Business intelligence. As business intelligence becomes a bigger part of business solutions across the board, it also affects project accounting software. With business intelligence programs, relevant data can be organized and analyzed more efficiently, helping users prioritize projects and structure their strategies accordingly. Keep an eye open for systems with cutting-edge BI tools.
Benefits & Potential Issues
A well-implemented system allows for better record keeping and insight. When users leverage these benefits effectively, organizations can realize increased profitability, lower costs, and other advantages. Project accounting systems should yield:
- Increased visibility. With the right system, the costs and budget of each project should be readily available. The system should provide information that makes it much easier to ensure that each project’s budget has not been exceeded.
- Solid reporting capabilities. Clients want to know that projects have gone well, and have not been conducted wastefully. With a good reporting function, software can make client reporting far easier and effective.
- Time tracking. To support billing processes, project-focused organizations need to track the amount of time they spend carrying out projects, so the right amount of billing can take place. Project accounting software can track hours to ensure that no time has been wasted, and that all due payment is tracked.
- Scheduling. Projects cannot be successful if they are not correctly scheduled. With scheduling taking place in conjunction with billing and accounting, project accounting software eliminates scheduling mistakes and links expenses to particular moments in time.