5 Fundamental Finance Tasks for PMs

Your project managers are key players in ensuring that the financial performance goals of the firm are met. PMs are responsible for managing projects, but to be truly effective, must also understand the firm's monthly financial reporting cycles and have the ability to plan, track, and evaluate each project's fiscal performance. 

Go over this list with your PMs. This is what they ought to know and be able to do:

1. Prepare the project budget and monitor its status. The project manager must prepare the project budget and monitor its financial status. This includes ensuring that the information in the firm's management information system (MIS) is accurate and up to date. In large firms, a project administrator may prepare the various input forms, but the accuracy of this information remains the sole responsibility of the PM.

2. Monitor the work done. The PM must monitor the work done or to be done. This should ensure that it is included in the authorized scope of services.

3. Seek additional fees for extra work. When work is required outside the contract scope of services, the PM must seek additional fees from the client. When extra work is proposed, the project schedule must be reviewed to determine the effect the additional work will have on it. A request for an increase in fees must identify any required work that's outside the contracted scope of services.

4. Get authorization for extra work. This extra work must be identified promptly when it occurs, and the PM must notify the client in writing. Most clients won't pay for extra work performed before it is authorized. The project manager is responsible for ensuring that no unauthorized work is performed on his/her project.

5. Invoice clients promptly. The PM is responsible for ensuring that clients are invoiced promptly and for following up on the payment of outstanding invoices.