Project Management Accounting: Budgeting, Tracking, and Reporting Costs and Profitability

Project Management Accounting: Budgeting, Tracking, and Reporting Costs and Profitability

by Kevin R. Callahan, Gary S. Stetz, LynneBrooks M. Brooks
Released April 2007
Publisher(s): Wiley
ISBN: 9780470044698

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Book description

Praise for Project Management Accounting: Budgeting, Tracking, and Reporting Costs and Profitability

"You don't need to be a Six Sigma Black Belt or a CPA to understand the principles and the practical tools presented by Callahan, Stetz, and Brooks in Project Management Accounting. Their approach focuses on sound financial practices that will improve the ROI of your project whether it is your first or your hundred-and-first experience."
—Barry Van Dyck, PhD
Director of Degree Programs, Executive Education, Mendoza College of Business, University of Notre Dame

"Project Management Accounting serves as a solid resource for the project manager seeking to leverage the tools of accounting and finance to maximize the quality of project outcomes."
—Jeffrey J. Lampe, CFA
Vice President, Hopewell Ventures

"Project Management Accounting clearly communicates fundamental accounting principles and applies them skillfully to the field of project management . . . even seasoned accounting managers will likely benefit from the application to project management. Talented project managers will find enough finance and accounting tools to transition toward profit and loss responsibility. This book will serve as a handy reference."
—Warren Davidson
CEO, Global Source Mfg.

"This is a must-read for everyone in business, whether you have made a career in project management, operations, facilities, or anywhere else. Project Management Accounting provides the framework to understand not only how to manage any project, but how the project interacts with the different functions of the company for the overall good. When applied, [this book] will improve the profitability of the company through an understanding of the costs and benefits of each project."
—Michael Alte
Management Director, ArvinMeritor

Today's project managers need to understand finance and accounting concepts in order to make both informed decisions and a greater contribution to their organization. Written for readers with limited business backgrounds, Project Management Accounting is an invaluable guide to successfully performing projects using sound finance and accounting concepts.

With the collected insights of authors and respected industry experts Kevin Callahan, Gary Stetz, and Lynne Brooks, Project Management Accounting offers guidance that project managers can use right away to know how to budget appropriately. Brief in presentation and rich in content, Project Management Accounting equips the leaders of today and tomorrow to hit the ground running with a profound business perspective in their current work and in future projects.

Table of contents

  1. Copyright
    1. Dedication
  2. Preface
  3. Acknowledgements
  4. 1. Project Management and Accounting
    1. Mission, Objectives, Strategy
      1. Information Collection
      2. Project Initiation
    2. Project Planning
      1. Work Breakdown Structure and Project Schedule
      2. Project Cost
      3. Resource and Procurement
      4. Quality
      5. Risk
    3. Project Execution and Control
      1. Communication
      2. Project Control
        1. Schedule Control
      3. Earned Value
        1. Change Control
        2. Risk Control
        3. Quality Assurance and Control
      4. Status Reporting
      5. Notes
  5. 2. Finance, Strategy, and Strategic Project Management
    1. Dupont Method
      1. DuPont Method Pyramid[1]
      2. Profitability Ratios
      3. Activity Ratios
      4. Solvency Ratios
      5. Practical Application of Ratios
      6. Notes
  6. 3. Accounting, Finance, and Project Management
    1. Project Team and Financial Success
    2. Calculating Return on Investment
      1. Equity or Debt?
    3. STO Solution Model
    4. Implementing Strategy throughout the Company
      1. Business Action Framework
      2. Portfolio Management
    5. Conclusion
      1. Notes
  7. 4. Cost
    1. Definition and Purpose of Cost
    2. Cost Classifications
      1. Product and Period Cost
      2. Cost Behavior
        1. Variable Costs
        2. Fixed Costs
        3. Semi-variable Costs
      3. Assigning Costs
        1. Direct Costs
        2. Indirect Costs
    3. Cost Decisions
      1. Differential Cost
        1. Sunk Costs
        2. Opportunity Costs
    4. Cost of Quality
      1. Prevention
      2. Correction
      3. Warranty
    5. Cost and Industry
      1. Service Industry
      2. Retail Industry
      3. Manufacturing Industry
    6. Conclusion
      1. Notes
  8. 5. Project Financing
    1. Debt Financing
      1. Borrowing
      2. Corporate Bonds
      3. Trade Debt
      4. Customer Deposits (Retainers)
    2. Equity
    3. Income Tax Effect
    4. Cost Implications of the Funding Methodology
      1. Method for Calculating the Company’s Cost of Funding
    5. Conclusion
  9. 6. Project Revenue and Cash Flows
    1. Role of the Financial Manager
    2. How to Calculate the Statement of Cash Flows for a Company
    3. Free Cash Flows
    4. Methods for Calculating a Project’s Viability
    5. Conclusion
      1. Notes
  10. 7. Creating the Project Budget
    1. Introduction
    2. Case Study: Pontrelli Recycling, Inc.
    3. Planning for the Future
      1. Pro Forma Statements
    4. Creating a Project Budget
    5. Review Project Financials
    6. Project Cash Flow
    7. Conclusion
      1. Notes

Product information

  • Title: Project Management Accounting: Budgeting, Tracking, and Reporting Costs and Profitability
  • Author(s): Kevin R. Callahan, Gary S. Stetz, LynneBrooks M. Brooks
  • Release date: April 2007
  • Publisher(s): Wiley
  • ISBN: 9780470044698