Accounting is different at professional services firms. Learn why successful firms use project accounting software instead of a general accounting solution.
Professional services is a catchall term for lots of different industries – consulting, marketing, staffing, engineering, and many more. And while each of those industries is distinct, every firm shares the same financial challenge – project accounting.
Success in a professional services firm is measured at the project level. Unfortunately, many of the financial management solutions on the market offer limited project accounting capabilities when they offer them at all. Firms end up spending huge amounts of resources on accounting without getting a true picture of their strengths, weaknesses, and overall performance.
The professional services market is growing and is projected to reach $5 trillion globally by 2020. In response, tech companies are increasingly designing solutions specifically for this market. Project accounting has historically been a pain point, which means developing an accessible solution has been a major priority. Project accounting software is now available to any professional services firm, and it creates exciting opportunities to improve accounting while driving growth:
Every project presents different accounting needs, which is why one-size-fits-all solutions tend to be disappointing. Project accounting software is customizable based on the features and functions the project requires. That could include project management, time and expense tracking, revenue recognition, and many more. Thanks to tailor-made tools, accountants have the exact data they need to manage projects in depth.
Accounting doesn’t operate in a vacuum, especially when it applies to short-term projects. Project accounting software integrates financial data with non-financial data from a CRM or other sources. Together, that data empowers firms to make smarter project bids and get better at preparing for projects. The right software makes strategic insights available on demand.
There is a thin line between profitable/unprofitable projects. It often comes down to how firms manage their internal resources – staff, time, equipment, etc. Project accounting software integrates all the relevant data and updates it in real time so that accountants and other stakeholders have exceptional levels of oversight. This software make is clear where, when, and how to allocate resources for maximum effect.
Since professional services firms rely on repeat business, customer service is a priority. Customers expect to receive accurate invoices on time, but the ongoing nature of the work means that is a huge workload for accountants. Project accounting software automates these workloads while engineering precision into the process. Accounting becomes more consistent while requiring a lot less input overall.
Project accounting software isn’t an optional or insignificant upgrade. Rather, it’s a financial management solution that brings your firm’s performance into stark relief. When you’re ready to learn more, consult with the experts at blumshapiro.