Project Management Accounting

Over the past few decades, Project Management has shifted from its roots in construction and defense into mainstream American business. However, many project managers' areas of expertise lie outside the perimeters of business, and most do not have the formal education in business, accounting, or finance required to take their skills to the next level. In order to succeed, today's project managers (PMs) who wish to soar to the top or remain at the helm of their profession need to have a comprehensive grasp of the business context within which they work. Providing a resourceful introduction to the interrelationships between finance, accounting, and Project Management, Project Management Accounting, Second Edition is designed to help PMs at various skill levels improve their business skills, provide advanced contributions to their organizations, and perform with greater proficiency. Authors and industry experts Kevin Callahan, Gary Stetz, and Lynne Brooks combine their decades of Project Management experience and insights to provide professionals in the field with a 360-degree understanding of how costs interact with the general ledger. Through the authors' seasoned expertise, PMs are better equipped to assess all facets of a project with a broader understanding of the "e;big picture"e; to determine whether to continue as planned, find an alternative solution, or scrap the project altogether. Rich with new content as well as many new case studies, this Second Edition of Project Management Accounting includes: Updated information on Project Management and its link to Project Accounting A new chapter on assessing risk when managing projects How to determine the greatest tax/cost savings Project Management in relation to a company's mission, objectives, and strategy Project Management in an agile business Coverage of agile Project Management as applied to software and technical projects New, updated, and timely case studies Sample checklists to help readers get started and apply concepts to their business Project managers must make vital decisions every day that impact the schedule, costs, or resources committed to a given project. Project Management Accounting, Second Edition, provides the tools and skills to help PMs establish with greater certainty whether these costs should be capitalized or expensed to stay on budget and improve a company's bottom line.

Over the past few decades, Project Management has shifted from its roots in construction and defense into mainstream American business. However, many project managers' areas of expertise lie outside the perimeters of business, and most do not have the formal education in business, accounting, or finance required to take their skills to the next level. In order to succeed, today's project managers (PMs) who wish to soar to the top or remain at the helm of their profession need to have a comprehensive grasp of the business context within which they work. Providing a resourceful introduction to the interrelationships between finance, accounting, and Project Management, Project Management Accounting, Second Edition is designed to help PMs at various skill levels improve their business skills, provide advanced contributions to their organizations, and perform with greater proficiency.Authors and industry experts Kevin Callahan, Gary Stetz, and Lynne Brooks combine their decades of Project Management experience and insights to provide professionals in the field with a 360-degree understanding of how costs interact with the general ledger. Through the authors' seasoned expertise, PMs are better equipped to assess all facets of a project with a broader understanding of the "big picture" to determine whether to continue as planned, find an alternative solution, or scrap the project altogether.Rich with new content as well as many new case studies, this Second Edition of Project Management Accounting includes:* Updated information on Project Management and its link to Project Accounting* A new chapter on assessing risk when managing projects* How to determine the greatest tax/cost savings* Project Management in relation to a company's mission, objectives, and strategy* Project Management in an agile business* Coverage of agile Project Management as applied to software and technical projects* New, updated, and timely case studies* Sample checklists to help readers get started and apply concepts to their businessProject managers must make vital decisions every day that impact the schedule, costs, or resources committed to a given project. Project Management Accounting, Second Edition, provides the tools and skills to help PMs establish with greater certainty whether these costs should be capitalized or expensed to stay on budget and improve a company's bottom line.

Preface xiAcknowledgments xvChapter 1 Project Management and Accounting 1Mission, Objectives, Strategy 2Project Planning 6Project Execution and Control 11Notes 21Chapter 2 Finance, Strategy, and Strategic Project Management 23DuPont Method 24Note 44Chapter 3 Accounting, Finance, and Project Management 45Project Team and Financial Success 46Calculating Return on Investment 53STO Solution Model 59Implementing Strategy throughout the Company 61Conclusion 68Notes 69Chapter 4 Cost 71Definition and Purpose of Cost 73Cost Classifications 74Cost Decisions 80Cost of Quality 83Cost and Industry 85Manufacturing Industry 89Conclusion 90Note 91Chapter 5 Project Financing 93Debt Financing 93Corporate Bonds 95Equity 97Income Tax Effect 99Cost Implications of the Funding Methodology 100Conclusion 112Chapter 6 Project Revenue and Cash Flows 115Role of the Financial Manager 115How to Calculate the Statement of Cash Flows for a Company 119Free Cash Flows 127Methods for Calculating a Project's Viability 128Conclusion 137Notes 139Chapter 7 Creating the Project Budget 141Introduction 141Case Study: Pontrelli Recycling, Inc. 142Planning for the Future 147Creating a Project Budget 157Review Project Financials 161Project Cash Flow 162Conclusion 168Note 169Chapter 8 Risk Assessment 171Risk to Your Reputation 175Competency 176Integrity and Honesty 177Organizational Structure 178Human Resources 179Reports on Financial Statements 180Project Specific Risk 197Engagement Acceptance 199Conclusion 200About the Web Site 201Index 203