Project accounting

Project accounting is a type of managerial accounting oriented toward the goals of project management and delivery. It involves tracking, reporting, and analyzing financial results and implications, and sometimes the creation of financial reports designed to track the financial progress of projects; the information generated by this analysis is used to aid project management. While project accounting was traditionally used for large construction, engineering, and government projects, it has now expanded into several other sectors. It is commonly used by government contractors, where the ability to account for costs by contract (and sometimes contract line item [CLIN]) can be a requirement for interim payments. A specialized form of project accounting, production accounting, is used by production studios to track an individual movie or television episode's costs. The capital budget processes of large corporations and governmental entities are chiefly concerned with major investment projects, which typically have significant upfront costs and benefits realized over the long term. Investment "go/no-go" decisions are largely based on net present value assessments; project accounting and cost/benefit analyses provide vital feedback on the quality of those decisions. Projects (which may be independent undertakings or occur as part of a larger program) differ from a company's routine activities in a number of ways: they frequently involve efforts across departmental boundaries, and their budgets may be revised many times over the course of their execution (which can range from days to years). Accordingly, in a project accounting paradigm, certain projects are considered separate entities in the course of working on products which require separate financial management, a task for which existing management accounting and financial accounting techniques are often insufficient.

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Related concepts (3)

Related lectures (3)

Project Management Essentials: Scope, Time, and Cost

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Outline of project management

The following outline is provided as an overview of and topical guide to project management: Project management – discipline of planning, organizing, securing, managing, leading, and controlling resources to achieve specific goals. A project is a temporary endeavor with a defined beginning and end (usually time-constrained, and often constrained by funding or deliverables), undertaken to meet unique goals and objectives, typically to bring about beneficial change or added value.

Project management

Project management is the process of leading the work of a team to achieve all project goals within the given constraints. This information is usually described in project documentation, created at the beginning of the development process. The primary constraints are scope, time, and budget. The secondary challenge is to optimize the allocation of necessary inputs and apply them to meet pre-defined objectives. The objective of project management is to produce a complete project which complies with the client's objectives.

Project accounting