Monday, March 14, 2011

Don’t Forget About Your Financial Responsibilities!

Being an effective project manager requires much more than proven technical proficiency. Especially during this last recession, your ability to protect the financial health of projects on a day-to-day basis became vital to their overall success. Now, as the economy continues to improve, that responsibility will become even more important.

Keep this list as a daily reminder of your key financial responsibilities as a project manager:

1. Budgeting. For every project, create a project business plan that balances your firm’s ability to provide professional, quality work with your client’s expectations and ability and willingness to pay.

2. Profit-making. It is the PM’s responsibility to deliver the project to the client and a profit to the firm. Ensure success by keeping a close eye on schedule, budgeting, and any additional costs (i.e. change requests) that could impact your profit.

3. Billing. Regardless of project status, clients should receive invoices regularly, without delay. Keep the billing cycle short.

4. Collecting. Firms need cash to operate, not completed projects. As PM, you have the closest relationship to the client, and are in the ideal position to “assist” the client in the payment process. The best expression of confidence in the quality of one’s work is to insist on prompt payment for it.

5. Reviewing charges. Ensure that all charges to the project are appropriate, and that all appropriate charges are billed. This includes ensuring that subconsultants submit their invoices promptly; you want to pay no late fees. A good financial history on projects is critical for future budgeting.

6. Using resources effectively. Clients will pay professional fees that yield profits to the firm—as long as they’re not paying for inefficiency or waste. You must control the effective use of people, materials, information technology, and all project resources.

7. Utilizing time. Salaries are the biggest expense for any professional firm. Direct salary costs produce revenue; indirect salary costs drain profits. It is your responsibility to make sure that your own time and that of your team meets utilization goals.

Find out what else you need to diligently keep tabs on in order to do your job well. Come to one of PSMJ’s upcoming Project Management Bootcamps! PSMJ’s Project Management Bootcamp is a revolutionary training seminar like no other-- through interactive case-studies, real-world examples, and proven solutions, you will foster innovation, elevate communications, increase productivity, and improve your firm's bottom line. Click here to register or call PSMJ Education Department at (800) 537-7765.

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