The business needs from an accountant have changed a lot in the past years. From providing simple bookkeeping services, most of the accountants are now taking up business advisory roles. These new roles require accountants to oversee various business projects through a financial angle. The work environment of accountants is thus becoming more and more project-and team-based.
For example, a financial firm can have a project to improve the process of filing tax returns or a project to minimize write-offs. These types of projects can span from weeks to several months or maybe a few years.
To ensure that the project is completed within time and the work done is of the highest standards, accountants need to equip themselves with better project management skills. In fact, the AICPA has recommended project management as one of its core professional competencies for next-gen accountants.
To better understand why project management is important for today’s accountant, let us first acquaint ourselves with a brief knowledge of project and project management –
Table of Contents
What is a Project? And what is Project Management?
Organizational work is performed in the form of operations and projects. Operations are repetitive and ongoing, while projects are unique and temporary.
For example, in an accounting firm, the ongoing process to get more clients and set up their financial accounts can be dubbed as operation while designing and developing a new business process to enroll customers can be termed as a project.
A typical project will require completion of several activities by professionals from various departments like IT, customer support and operations, etc. Some of these activities have to be performed sequentially, like developing a prototype before testing, and some activities can be performed simultaneously, like documenting the development process.
Careful attention must be given towards resource allocation, scheduling, and coordination of all these activities, to meet the objectives of any project.
Every organization takes on a project intending to achieve some strategic business objectives like profitability or market position. Thus it is imperative that the project goals and business objectives are streamlined.
Efficient project management requires to carefully understand this relationship so that the product or service procedures delivered to the client, meet the client’s business objectives. Otherwise, the project can become a success in terms of schedule and cost, but a failure as the client objectives were not met.
Thus, we can now define a project as a temporary endeavor undertaken to deliver a unique process, product, or service that meets the client’s expectations and help them achieve a strategic business objective.
We can also say that the primary objective of project management is to complete the project within the allocated resources of time and budget for a satisfied client.
Why Project management?
“Operations keep the lights on, strategy provides the light at the end of the tunnel, but project management is the train engine that moves the organization forward”
– Joy Gumz, Senior Director at Project Auditors.
Any activity in this world that requires planning, proper execution while keeping track of time and monetary resources requires necessary project management skills; it can be as simple as planning a birthday party or as complex as sending a rocket to the moon.
Project management is vital for any accounting firm or any accountant heading a project because of the following reasons –
1) Helps to define a plan of action and reduce chaos –
The importance of clear-cut planning cannot be overstated before beginning any project. The more complex the project, the more is the room for chaos.
Project management helps to reduce the factor of uncertainty and reduce future chaos. It helps to eliminate typical mistakes like overestimating how quickly a product or service can be delivered or underestimating the cost.
2) Keeps the focus on project objectives –
A project is a temporary and unique venture alike the ever-going business operations; thus, there is no roadmap available to follow. Naturally, because of this, the project objectives get muddled as the project progresses.
Lack of clearly set goals is the main reason behind project failure in today’s time. Project management helps to define the project objectives clearly and keeps it in check that they are kept in mind so that the actual outcome of the project meets the client’s expectations.
3) Streamlines the project with business strategy –
A project is not deemed to be successful until and unless it has fulfilled any business
strategy. Long term business strategies are achieved by completing the short-term objectives of several different projects.
Project management ensures that the project is going in the right direction, and no work is being done that is not in line with the business strategy of the organization.
For example, if the business strategy is maximizing profit, then project managers should ensure that the product/service to be delivered is developed with the least cost overhead.
4) Keeps the process managed –
Project management is a proactive process that ensures that the right people do the right tasks at the right time. Without project management, people tend to work reactively – solving problems as they come without any set goal or approach.
Project management helps to take a proactive approach by accurately identifying risks and laying a proper plan to mitigate them right from the start. It also helps to breakdown complex tasks into manageable smaller subtasks.
With proper deadlines and milestones in place, the accounting managers can deal with issues more efficiently and effectively.
5) Helps in quality control –
Quality control is also an important aspect to look for while working on any project, because in the end, what matters the most to the client is how good the product or service delivered.
It is tough to keep a check on quality when the teams are under a lot of pressure to deliver the project within time and budget. This pressure can lead to a decrease in the overall quality of work resulting in client dissatisfaction.
Project management helps to define the outlines of the deliverables and their quality standard so every person knows what they should aim for.
6) Reducing costs –
A recent study by PMI says that ‘on average organizations globally waste 9.9 percent of every dollar invested due to poor project performance’, this means that for every $1 billion invested $99 million is lost.
Project management can help in cutting costs by – fully optimizing the available resources, avoiding fees caused by delays, and increasing the overall quality of deliverables.
Project management requires us to step back from the task before us, to look at how each element fits into the bigger picture, only to find it as a part of a larger mosaic.
Accountants must see the bigger picture if they want to become trusted business advisors who are far greater than a compliance checker. Successful accountants try to balance between a bunch of different skills apart from their technical knowledge and project management helps them put these skills to use.
Becoming successful project managers will not only help accountants to hone their technical skills like scheduling and risk and budget analysis but also develop new skills like relationship building and leadership qualities, which will ultimately help them to become successful business leaders of tomorrow.