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

Conclusion

As we have seen throughout this chapter, a project's budget does not exist in isolation from the rest of the company. The current financial situation of a company as well as projections into the future must be considered during all phases of the project. When choosing a project, the project manager must take care that it is in alignment with the company's strategic and financial goals and contributes to the growth of the company.

Senior project managers who would like to continue to add value to the company must be able to understand more than the internal functioning of their project. They must also be able to understand the larger picture of the company and how their project fits into and affects that picture. Fortunately, the problems identified in the Pontrelli Recycling, Inc. example, although serious and having a significant effect on the future financial picture, were not so great that the project should be canceled. However, if project managers did not have the larger financial picture, they would not be able to advise the company on possible outcomes.

Note

1. Kevin Callahan and Lynne Brooks, The Essentials of Strategic Project Management (Hoboken, NJ: John Wiley & Sons, 2004).