If you have a project-centric business, having good project tracking software is an important part of being successful. There are many administrative components to a project and good project tracking software allows you to create a process around these components and easily move through the process. The ultimate goal of project tracking software is to give insight into your projects, turn your time into cash in the fastest time possible, and minimize administration around your processes.
The first component of project tracking software is the ability to record information by each project. To do this, the system will require you to set up each project as a separate entity. Since most companies have more than one project they want to track, this means the system must have an easy way to get projects established. Projects can also be of many types, i.e. fixed price, time and expense, time and expense to a limit, etc. Many companies have these different types of projects running at the same time, requiring the software to have the flexibility to allow the different types of projects to be set up and running at the same time. To make project setup easy, good project tracking software will have a template or “save as” feature that allows you to set several types of project up once and then copy the recurring information, requiring data entry only for the items that are specific to that project. This minimizes setup time as well as facilitates the processes around your projects.
Once the project is setup, you want a way for you and your employees to record time against the projects. You also want the ability for multiple employees to enter their time to a project. On larger projects, you may want to have a project manager or someone else approve time prior to it being posted to the project. This keeps management in the loop as well as stops errors early in the process, where the effort to correct them is nominal. Additionally, you will want the ability to track time at the level that is right for the project. This means that you may only want to track overall time on the project. It could also mean you want to track time by tasks within the project. For progress purposes as well as analysis, you may also want to track budgeted amounts against the actuals. While tracking time and billing are what keeps the company in business, entering time is something most employees do not like to do. Because of this, time entry needs to be simple. Good project tracking software is flexible enough to allow all the different project scenarios yet still is easy to use. Look for systems that allow each team member to enter their own time, allow multiple entries on a timesheet, and minimizes the number of fields to populate.
Another component of project tracking software is the ability to track expenses associated with the project. It is important to track all expenses you incur for the project and ideally bill them. A good project tracking system allows team members to enter their expenses to a project and if need be, allow a project manager or someone else to approve the expense prior to it being posted to the project. This review provides management a good understanding of the expenses and helps to ensure that billable expenses are captured and available for billing.
The next component of project tracking software is billing for your work. You will want the system you use to automatically pass time from the timesheets to the invoicing module. This eliminates double data entry along with the risk of errors. Once time is ready to be invoiced, you will want to do this with as little effort as possible. A good system will allow edits to be made in a few easy steps. Ideally you will be able to change the components of the invoicing – rates, hours, or totals – on the screen. When you are ready to finalize the invoice, the system should then automatically post it to the financial modules. The general ledger should be updated for the revenue and the accounts receivable detail should be updated with the amount your customer owes from the invoice. Should you want to, the system should allow you to see how much each customer owes by project so you can balance the work performed with the amounts owed.
Finally, the project tracking software should have the ability to track progress on each project. On larger projects, budgets are a key piece to this. Entering budgets and tracking actual time against the project allow you to see how the project has progressed at any time. This is a big part of being successful. Catching overages as they are happening is very powerful. This allows you to correct the issues before they become too big. Additionally, this comparison helps you identify when the project’s scope has increased so you can ask the customer for a change order proactively, when you have more leverage, instead of waiting until the project is done. Once your project is complete, budget to actual comparisons allow you to review how the project went and what needs to be changed on the next estimate. A component of knowing the progress on a project is the reporting capabilities. As I noted earlier, you will want to pay attention to time charged to a project versus the time you budgeted. The system should also be able to report on profitability by customer, the time written off by project, utilization rates for your employees, and realization rates.
Good project tracking software allows you to better understand your business and make informed decisions. It can be a difference maker in your cash flow and allow you to create processes and procedures around your projects that will help make your company successful.
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