Project Management for Accountants: Effectively Plan Engagements to Achieve Success
Ed Kless · Journal of accountancy online/Journal of accountancy · 2010
EXECUTIVE SUMMARY * Project management is results-focused concept based on planning and achieving firm objectives. * Project management can replace time sheets. Firms that use project management do not need to track time on an hourly basis. * For project to be successful, the scope must be accurately defined. Scope is the of the products, services and results. Some elements of well-defined project scope include: scope statement, list of objectives, constraints, project structure, definition of project roles, and deliverables. * In project management, the term means the specific steps needed to accomplish the objectives and deliverables of project. To track and measure each issue, construct detailed issues list to identify, describe and prioritize the tasks. An issues list will also include information about who is responsible for each issue, and projected due dates. * Successful project (engagement) management is based on complete issues list, not time sheet. Using metrics from the issues list, project manager can assess the likelihood of the total project actually being completed by the due date. ********** Project management is client-focused process that significantly increases the probability of providing the desired to the client. It can help an accounting firm plan its resources more effectively and ensure that work is delivered to clients in timely manner. The project management methodology enables an accounting firm to manage its engagements prospectively, not retrospectively, such as through time sheets. When properly implemented, project management can provide your firm with competitive differentiation by defining the success of your firm the same way your clients do--through results. This article explains the important tools and objectives underlying project management. [ILLUSTRATION OMITTED] WHAT IS A PROJECT? Most accounting engagements clearly qualify as projects. According to the Project Management Institute (PMI), project is a temporary endeavor undertaken to create unique product, service, or result. Further refining two words in this definition provides tremendous insight into project management. Those words are temporary and unique. To understand project as temporary is to understand that it must have clearly defined end. For CPAs, this would mean set of client-specific deliverables, such as tax return, compilation or review, cash flow projection or an audit. The unique aspect requires an understanding that, while you may have participated in similar projects, each one is truly different. There are no plain vanilla tax returns or audits. Each one has slightly different set of goals and objectives and, more importantly, they clearly involve different constraints and client personalities. Nowhere in the definition of project is there provision for the number of hours spent on the job. It cannot be said that, if project (engagement) is believed to require less than X hours, it is not project. SCOPE What needs to be clearly defined under the PMI definition of project is the sum of the products, services and results you want to achieve. This is the scope. A scope does not take the place of an engagement letter. For project, the scope can go well beyond standard engagement letter. A properly written scope document has some essential elements. They are: Scope statement. The scope statement defines in one sentence what the project will accomplish. An example scope statement would read: To provide (end-product) on or before (due date) and at price of (dollar amount). This statement addresses three specific subelements: scope, due date and price. Although this statement appears at the beginning of the scope document, it is easier to write after the rest of the document is completed and an overall idea of what is to be provided emerges. …