Sturla Røysland Jul 9, 2021 9:07:46 AM 9 min read

Effective project management will stop you from wasting time and money

Most project-based businesses spend a lot of time structuring and following up on projects. The easier this process is, the less time is spent on setup, remembering deadlines, and deciphering numbers as the projects move forward. This allows you to save time, focus more on delivering great work to your clients, increase profitability and gain deeper project insight.

A great project management system can help you do this, so in this blog post, I'll explore the key functionalities you want to look for.

What you should look for

Flexibility, availability and good overview are key elements. You want a cloud based solution that lets you set up a project in a few minutes and alert you with relevant feedback on project status. It should be easy to define budgets, hourly rates, and activities. The system should also allow you to make adjustments underway, either in the setup or incoming time records and expenses. Lastly, your project management system should contain a report engine that will allow you to create highly customizable reports. Let's go into details below...

Picture1_ Effective project management will stop you from wasting time and money Keep your project planning in an easy-to-use,
the cloud-based system will make it accessible
from anywhere).


 

 

 

Budgets and price models

Having an easy way to set up your budgets with corresponding price models will help to clearly distinguish what, how and when you should invoice your clients. Most projects typically consist of several phases or activities, each of which could have a separate budget. Some budgets are hourly rate-based, meaning that an hour worked usually equals an hour paid. Other budgets will have a fixed price model, where you invoice your client the same amount regardless of how many hours you put down. Having the freedom to combine hourly rate and fixed price gives you tremendous flexibility in budgeting.

Activities and tasks

As mentioned, most projects consist of several phases or activities. These can often be broken down into sub-activities or tasks. Having a simple way of defining all the activities and tasks of a project makes it easy to create structure in your project. You want to be able to define, categorize and group the work that needs to be done, as well as adding hourly estimates and deadlines. Should you need to plan your resources, having everything properly set up will make the process a lot easier and give you a lot more insight into your planned work.

It's one thing to set up and plan everything that needs to be done, yet it's another thing to keep track of it all. You want your project management system to alert you know when you've passed certain thresholds, for instance when you've spent 50% of your estimated hours, or when an activity or task is reaching its deadline. It should be easy to see exactly how much has been invoiced, how much of your budget is left, and what profit rate you can expect. This way, you can focus on delivery instead of worrying about missing a deadline or going over budget.

Time-record approval


Not all time records are created equal, therefore you want a simple way to oversee incoming hours and check that the descriptions and number of hours are up to company standards. If you spot inconsistencies, you want an easy way to edit the time records or return them to the coworker with a comment on what needs to be improved. Also, most project managers know that non-billable time is an unfortunate part of many projects. However, when you need to shave some hours off your upcoming invoices, having a simple way to so will at least ensure that you save time while keeping your clients happy. Adjusting billable time independent of registered hours is a minimum in any PM system, and should be done without much fuss. Having a way to document this to your clients will also save a lot of time arguing back and forth.

 

Picture2_ Effective project management will stop you from wasting time and money

Keeping track of essentials information in your projects will help to assess project performance and plan future projects

 

 

 

Expense tracking and billing


A lot of projects will contain some form of expenses beyond just hours. This makes tracking and billing those expenses an essential part of project management, and you want this to be a simple operation. Some project expenses come in the form of electronic invoices to your accounting system, while others could come in the form of a PDF-file or even a physical receipt. Either way, you want to be able to register expenses directly in a project, associate it with the correct activity and determine whether you're going to cover the expense yourself or bill it to your client - with or without surcharge.

Project reports

Lastly, when all is said and done - the project is delivered and it's time to count the score, having an effective way of creating highly specific reports will help you to gain necessary insight into the project and assess whether it went according to plan or not. Since you divided the project into activities and tasks, added in hour estimates, kept track of time usage, accounted for non-billable hours and were following clearly defined budgets, it should now be easy to see whether the project performed well. You should be able to see how you fared in each activity, if you estimated correctly and if you need to make adjustments in future projects. Comparing this project to other projects, either one to one or across project categories is something your reporting tool should allow for.

Conclusion

Having effective tools for project management will ultimately save you time and money, grant you better insight, and help you plan future projects both quicker and better. Also, it will lower your shoulders and help you focus on delivering better products and services to your clients since you can trust the system to notify you when needed.