A Project Accounting Drama in Multiple Acts
*This post was updated May 2022*
Several years ago, a prospective client came to us and said they were interested in implementing Projector as their Professional Services Automation (PSA) tool. When the organization began shopping for PSA software, they were a small, 8-person start-up consultancy and Projector was probably overkill for their existing needs. They predicted, however, that they were going to grow, both in size and in complexity. Their expectations were realized, and within a few years, their staff expanded 25-fold, with quickly expanding operations in five different countries, and they diversified beyond their traditional consulting business model. This dynamic professional services organization turned themselves into a very attractive strategic acquisition target for one of the largest and most well-respected global firms in their space, and still use Projector to this day.
A Hidden Message – Scaling a Business through Thoughtful Integration
Any professional services entrepreneur or business leader would be proud to have their organization follow that narrative However, there is a secondary theme that accompanies this inspirational tale. That sub-plot is a story about how the company accomplished this entire process with a single set of systems for PSA and accounting:
Projector as its PSA solution of choice integrated with one of the shallower, simpler accounting systems. Using a basic accounting suite did not reflect the firm’s actual financial control capabilities; they had hired some serious operational and financial management talent from the start and had sophisticated control and reporting needs from day one. Rather, they realized that an investment in the right PSA tool, Projector, would allow it to take on the critical facets of their project accounting. When they considered an upgrade to a Microsoft Dynamics or an Oracle or an SAP, they decided that they could delay that upgrade (and all the attendant turmoil it would cause) because Projector was able to manage the details and effectively scale with the business.
A Close-up on Project Accounting
Projector as the project accounting subledger handled all the recurring transactional details of approving expenses, recognizing revenue, and billing clients. Rather than forcing the general ledger to process copious quantities of detail, and potentially impede its functionality, transactions aggregated to just the right level flowed over to the accounting system. Projector then provided all the necessary drill-down capabilities and reconciliation through appropriate control accounts, mirroring the of functionality a premier subledger. Additionally, Projector was able to accomplish these tasks based on work that normal project, resource, and operational managers do on a day-to-day basis, all without expecting that they understand the difference between a debit and credit or how to spell “chart of accounts.”
A Panoramic View of the Back Office
Best-of-breed Professional Services Automation software like Projector empowers executives to pull back from the individual transactional detail to form a perspective of their organization’s historic and current performance. They are able to analyze their performance against revenue targets, identify the most profitable clients, and set a strategic agenda that facilitates smoother business growth.
The leading PSA systems go beyond a purely financial view of the business by combining it with a holistic, balanced perspective of a firm’s operational priorities and areas for refinement. These industry-focused feature sets can play a critical role in staffing, resource utilization, budget management, and revenue forecasting.
Professional services organizations can find answers to optimizing these facets of their operations with robust performance dashboards. These dashboards provided the big picture, the panoramic view of business is performing.
The Grand Finale that Extends Accounting Systems
The point of this whole story is that it sometimes pays to look a little deeper, even when you think you have identified the key area to address. If you think your accounting system is on its last legs and desperately needs an upgrade, it may be because you are asking it to manage your operational performance with financial transactions. Rather than an expensive and intrusive total system replacement, you may be able to extend its useful life, and drive exponential business growth as well. One approach is to implement a purpose-built system like Projector that is specifically targeted at the needs of a professional services firm, rather than force those industry-specific needs on an application like your general ledger.
If you already use a different Professional Services Automation solution, you may want to take a hard look at it to see if it is meeting your current needs. A quick and effective way to do this is by taking a look at our e-book “Choosing the PSA solution that Fits Your Organization.” As with a good murder mystery, sometimes the antagonist is really the victim, and the truly guilty party rarely is whom you first suspect.
If you would like more information about how Projector can act as your project accounting subledger and extend the life of your accounting system software, read more about our current project accounting system integrations.