1. What is the major point of the article?
2. How does the accountant view project costs?
3. How does the controller view project costs?
4. How does the project manager view project costs?
5. What other costs does the project manager need to be cognizant of? What actions should the PM take concerning these other costs?

Project cost seems to be a relatively simple expression, but “cost” is more than a four letter word. Different elements of the organization perceive cost differently, as the timing of project cost identification affects their particular organizational function. The project manager charged with on-time, on-cost, on-spec execution of a project views the “on cost” component of his responsibility as a requirement to stay within the allocated budget, while satisfying a given set of specified conditions (scope of work), within a required time frame (schedule). To most project managers this simply means a commitment to project funds in accordance with a prescribed plan (time-based budget). Others in the organization are less concerned with the commitment of funds. The accounting department addresses expense recognition related to a project or an organizational profit and loss statement. The accountant’s ultimate goal is reporting profitability, while positively influencing the firm’s tax liability. The comptroller (finance department) is primarily concerned with the organization’s cash flow. It is that person’s responsibility to provide the funds for paying the bills, and putting the unused or available money to work for the company.

  • CreatedMay 27, 2014
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