Controlling Finance Projects

Objectives

After completing this lesson, you will be able to:

  • Discuss how Project Control helps control Finance Projects

How to control a Finance Project

Introduction: Controlling Finance Projects

For many purposes, companies run projects to plan and coordinate the work, staff employees, and track project progress and costs. In this scenario, a Work Breakdown Structure (WBS) as an accounting structure is created. Planned project costs can be captured. After releasing all or part of the project, the project is executed. Time can be recorded, and project-related purchasing can be performed.

Task 1: Create a Project

In this first task, Shubham, our Project Financial Controller, creates an Overhead Project. This project type is used to support the planning and monitoring of project-related costs, in this case hierarchical projects accounting structures, such as R&D projects.

Shubham is able to plan and post costs for the project, monitor the project, and finally close the project.

Overhead projects allow the settlement of costs to different G/L accounts and costs centers based on the settlement rule created.

Task 2: Capture Cost plan and Budget

In the second task, Shubham would like to add planned cost information to WBS elements.

Therefore he downloads a template to his local PC, fills in the relevant data, and uploads them back to WBS elements.

Task 3: Project Execution

Shubham, our Project Financial Controller releases the project and does a direct activity allocation.

Stefan, our General Ledger Accountant, post general journal entries. Inside data he enters the necessary WBS element.

Task 4: Monitor Projects

Shubham wants to monitor project progress. He pays special attention to project costs and budget values.

Finally he sets the project status to complete and closes the project.

Now you should have an impression of "How to maintain a Financial Project".

Finance Project Control

For many purposes, companies run projects to plan and coordinate the work, staff employees, and track project progress and costs.

In this scenario, a Work Breakdown Structure (WBS) as an accounting structure is created. Planned project costs (uploaded by the project financial controller) can be captured in SAP Analytics Cloud. After releasing all or part of the project, the project is executed. Time can be recorded, and project-related purchasing can be performed. In finance, allocations or general journal entries can be done with regard to project WBS elements.

The project financial controller monitors the project costs through overview pages and detailed project reporting.

At period end, depending on the type of project, different period-end closing activities such as overhead application or settlement can be executed for a project.

Afterwards, the financial controller completes and closes project parts and then closes the complete project.

Watch the following video to understand how a possible process could look like. You learn which users and which roles are necessary to control finance projects.

Applicable Process Steps

To sum up the steps you saw in that video, here are the general process steps listed:

  • Project Financial Controller: Creates and releases project
  • Controller: Performs direct activity allocation
  • Employee: Does a time recording
  • Project Procurement Controller: Perform a project based procurement
  • General Ledger Accountant: Posts general journal entries

Benefits

The benefits of Controlling Finance Projects are:

  • Create and maintain simple project up to highly complex hierarchical projects
  • Select different project profiles
  • Capture planned project costs and allocate budget
  • Assign accounts of documents in financials and procurement or external applications to capture actual costs
  • Monitor project-related purchase requisitions and purchase orders
  • Receive live insight into project costs by comparing plan and actual costs as well as commitments
  • Settle project costs to cost centers, G/L accounts, or asset accounting
Note

This process flow is covered in scope Item 1NT - Project Control for Finance.

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