Finance management best practice for project managers

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budget and financial management

The events of the last 12 months are something that nobody could have predicted and relatively few were able to cope with effectively, although skills learned in project management courses will certainly have helped. However, in terms of finances, those organisations where there is enforced financial best practice may have found themselves in a better position to deal with the situation than those that hadn’t.

Financial management is a critically important factor in business and having a good structure in place allows your finance department to not only organise and plan but also direct and control your financial activities in a manner that is consistent, responsive and responsible.

Here we examine some of the best practices that you should be looking at if you work as a project manager in financial management.

Select the right metrics

A project manager isn’t always an expert when it comes to financial data, so they need to make sure that any metrics they are using make sense, it is important to have more than one metric. If you only use the one metric, then you may be limiting your ability to achieve any financial goals you have set. It is also important to ensure that you not only know your key performance indicators (KPIs) but also that you can see them on their own and easily.

Regularly review your metrics

Once you have decided what your financial project data is then you will want to ensure that you look at it regularly. You shouldn’t just consider regular reviews but ensure that they are carried out. The importance of these metrics should be reinforced as a matter of best practise. Start your meetings with a review of the data before you begin any other discussions, especially if there’s a risk your project budget will be slashed.

This might be tricky when daily tasks and emails can be distracting however getting into the habit of beginning each day with a look at any financial reports for the project can be invaluable.

Lead by example

Any dashboards and reports you need your project managers to look at are only as good as the data they contain. It is important that you team do not wait until the end of the week in order to enter invoices from vendors or capture time otherwise you as the project manager will be in the dark all week. Data should be inputted on a regular basis to ensure everyone is kept in the loop, so it is important to lead by example and ensure that your project team follow you.

Don’t allow high performers to break rules

It can be easy to allow those individuals who bring in business to get away with more, however this can create a bad example. This can be a chance for those high performers on a team to show everyone else how you can follow best practises in order to achieve the best results possible. On occasion you may also be able to identify individuals who may make excellent project managers themselves, with the right qualifications, such as the APM PMQ, for example.

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