Project Finance Best Practices
Think back to your most recent project – was it completed within budget? If the answer is no, do you know exactly what caused the overrun?
By improving your project financial management strategies, you gain more control over budget spending, better visibility of performance and have the answers to all these questions and more.
In this article, we’ll run through a few best practices and tools, with examples of what works for our own software implementation projects.
1. Use Data to Form Accurate Estimates
Estimating the price of a project incorrectly can get the project off to a rocky start, impact profitability and lead to some difficult conversations.
To help you calculate estimates accurately, use a combination of:
- Cost of time, resources and overheads for individual tasks
- Industry benchmarks and competitor trends
- Data from recently completed projects
- The potential cost of common risks
Continually review your estimates in line with the cost of labour and resources, and share updated figures with the rest of the team to ensure all projects are quoted correctly.
2. Clearly Define the Scope of Every Project
If the scope of the project isn’t clearly defined before it begins, you could risk starting a project you’re unable to complete on time and doing extra work that wasn’t part of the initial costing.
Here at PKF SCS the scope of the project is defined at a high level during our Sales process (the ‘Concept’ stage). At the start of all new projects, we have a Business Process Review where we output a Solution Definition Document (SDD) and Project Plan (the ‘Definition’ stage). These documents detail exactly what the project will entail, including goals, deliverables, and tasks, as well as clear ‘out of scope’ items.
This technique works well for us because it ensures expectations are aligned, prevents scope creep and allows us to properly plan our internal resources. As a result, we’re able to deliver the project on time and on budget, keeping us and the client happy.
We recommend having your own formal scoping process that documents exactly what each project will cover.
3. Track Budget Spending in Real-Time
Looking at your budget spending at month end or after a project is complete is a big mistake because by that time, it’s too late to course correct.
Methods to help track and control project spending:
- Set up approval workflows and spending limits
- Set up alerts when spending exceeds budget
- Continuously monitor budget vs actuals
- Create dashboards to track project performance
Spending controls and real-time tracking help you to prevent overspending and react quickly when costs are getting above the thresholds you set.
4. Allocate All Direct & Indirect Costs to Projects
Missing out too many costs associated with delivering a project could lead to inaccurate reporting, undercharging clients and skewed estimates for future projects.
Start by thinking about the types of costs you frequently deal with and use this information to set up your systems so that as a cost is incurred, it’s automatically assigned to the right project.
If you have field-based staff, you may want to consider mobile apps for timesheets and expenses to ensure time and expenses are submitted promptly and accurately.
This helps you to trust your data, get a more accurate picture of your project’s profitability and make well-informed pricing decisions.
5. Continually Review and Improve
With each project completion, there is a goldmine of insights that you can use to improve for future projects.
After each project, run reports to analyse and review performance, identify what went well, what didn’t and specific areas to improve.
Use these insights to refine future pricing and estimates, make organisational changes and put systems in place to control finances for future projects.
6. Use Specialist Project Financial Management Tools
Even with the best intentions, keeping your projects on track is a struggle without the support of the right tools.
Common issues with outdated and non-specialist solutions:
- Data is siloed in different systems, making collaboration difficult
- Manual data entry takes too long and increases the risk of errors
- Difficulty allocating costs to the associated projects
- Reporting takes too long and can only be done after project completion
- Lack of project budget spending visibility
Here are 3 tools to suit a variety of needs and budgets:
Sage Intacct Projects
The Projects module in Sage Intacct is a cloud-based solution which helps you to track project performance, allocate resources and automate tasks such as revenue recognition, time/expense tracking and resource allocation.
Find out more about Sage Intacct Projects here.
Sage 200 Project Accounting
Project Accounting is a module in Sage 200 that allows you to model simple or complex project structures and analyse the costs and revenues of your projects in detail.
Read more about Sage 200 Project Accounting here.
Sicon Projects
Sicon Projects is an add-on for Sage 200 designed for project-heavy industries such as manufacturing and construction. It covers job costing, WIP management, time and expense recording and more.
Visit our Sicon Projects page here.
We implement and support all these solutions in-house. We can also help you with evaluating your options and choosing the best solution.
Summary of Key Actions
- Use all the data at your disposal to calculate accurate estimates
- Set up a formal project scope and documentation process
- Track budget spending in real-time and enforce spending controls
- Set up your systems so costs are automatically allocated to the right project
- Analyse data from completed projects to make future improvements
- Utilise specialist project financial management tools
Working With a Partner
We’ve delivered many Sage software implementation projects over the years, so we understand the challenges of delivering projects on time and on budget.
Changing financial software is a big investment and requires a lot of expertise, support and involvement to get it right. To minimise these challenges, our Project Management team uses many of the strategies mentioned in this article and have seen improvements to customer satisfaction and project success.
“Thank you very much for your assistance with this project. It was an absolute pleasure working with you, in fact the best interaction we have had to date in relation to our Sage solution.”
– Gary Meadows, Service Project Manager at GMG Color.
If you’d like to work with a partner who really gets it, get in touch. We’ll arrange a call with you to understand your needs and match you with the right solution.
Project Financial Management FAQs
What is project accounting?
Project accounting, (also known as project cost accounting) is the process of tracking the costs, revenue and resources associated with individual projects.
What is the best software for project accounting?
The best software for project accounting is one that meets your specific needs and integrates with your other systems. Sage Intacct Projects, Sage 200 Project Accounting and Sicon Projects are all popular software solutions which integrate with Sage and offer you control and visibility over your project finances.
What KPIs should I track for project financial management?
The KPIs you should track may vary depending on the types of projects you complete, but here’s a good place to start: Project Budget Variance, ROI, Utilisation Rate, Progress Percentage and Project Margin.
Written by Jessica Allen, Marketing Executive at PKF Smith Cooper Systems
Reviewed by Craig Taylor, Project Services Director at PKF Smith Cooper Systems
Last reviewed: June 2026
