Posts Tagged integration

When project management software isn’t your thing

From time to time we encounter prospects with the following modus operandi. The company:

  • Uses a small to mid market accounting application such as QuickBooks, ACCPAC or Great Plains for financial reporting
  • May be using Microsoft Project to build plans for projects that require planning
  • Has implemented spreadsheets (or a custom app) to track cost and billing information that is then manually keyed into the accounting system

The company’s management is aware that how they run their business can be much improved and there are tremendous cost avoidance, cost reduction and revenue increase opportunities if the right process improvements are made. The company has allocated the funds and resources to make the investment. Now the hard work begins.

After months of research, demos, questions and walkthroughs the decision is made to purchase a solution like Tenrox project workforce management. The full software cost including a multi-year on-demand agreement, integration and implementation costs are prepared by the vendor and reviewed by the company.

And here comes the doozy.

After reviewing the project deliverables, some of the members of the customer team in charge of the initiative insist that all project details be exported back into the accounting system. The rational being that financial types (CFOs, senior executives) want to have all the cost and detail information in the accounting system. Sounds pretty harmless doesn’t it?

The problem with this approach is that the accounting system is being used as a detailed project tracking system with too many GLs (general ledger accounts), too many segments, too many transactions, too much data. Also, if you look at any GL entry in the accounting system you will still not be able to easily trace it back to the exact time entry, expense entry, or project charge that created it, unless you add even more complexity to the GL transactions you create.

Here is a true story from one of our customers who experienced this (names are anonymous for privacy):

“Many years ago, I recall we attempted a similar initiative at XYZ. We decided that we wanted to know everything when we look at our financial reports:

  • who bought which products and services?
  • how much did the project cost us?
  • which customers, projects, products or services has the most margin?
  • how much expenses were incurred for a project, by an employee, etc.

We redesigned our GL accordingly and came up with a 3 page document that described the GL structure. I came into the office 2 days later and was passing by the desk of one of our accounting resources. The image of Mary (not her true name) has been with me since that day, I will never forget it.

Mary had an expense report in front of her and she was on the third entry. She looked exhausted and confused. I asked Mary if everything is ok. She said she was having a lot of trouble understanding what each GL segment meant what and which full GL should be used for every expense type. The combinations were too many! We tried various lists and formats to try and simplify their work without success. Our entire accounting team was frustrated and confused by the complexity.

We ultimately dumped our “smart” GL system and went back to a more simplified GL model that captured cost and revenue information at a high level for financial reporting.”

Before you roll out any project management system, you should be convinced of the following fundamental principles, or the project management initiative will fail before it ever sees daylight:

  1. Use your accounting application to do what it is created for; to report on financials
  2. Use your project management system to plan, budget and track detailed project and workforce actuals, cost and revenue
  3. Export client/project cost and revenue transactions to your accounting application with enough detail to manage your receivables, accounts payable and financial reporting. However, stay way from trying to reproduce in two systems detailed cost and revenue information that you already have access to in your project management solution.

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