The practice of the Accounting profession while steeped in principles, is not cast in stone as the peculiarity of the circumstances may determine how these principles are deployed. Project accounting for instance with a Los Angeles accounting service is an aspect of the practice that demands specialized handling. This is because it is executed on a project-by-project basis with detailed tracking of the individual components of that project. In got contrast to standard accounting, project-based accounting (PBA) provides a highly focused snapshot of the day-to-day finances thus giving an opportunity for tighter control over budgets, costs, bookings, billings among other areas.
Many project fails as a result of exceeding the budget allocated and this is not shocking as 34% of projects have no baseline, according to Wellington Project Management. The Project Management Institute also reports that an estimated $122 million is wasted out of every $1 billion invested in projects as a result of poor performance. Harvard Business Review further buttresses the foregoing statistics by stating that the average cost overrun of an IT project is 27%. These are all pointers to the non-existence of an efficient PBA system.
Typically deployed for use in a business like medical services, government contracts, and constructions contracts, PBA allows for close scrutiny to detect areas that may squeeze margins. The objective is however, to find ways of optimizing cash.
By using a Los Angeles Accounting Service for your Project-Based Accounting systems you will accrue a number of benefits. A few of them are as follows:
1. Its ability to record incremental daily expenses and revenues provides vital and immediately actionable information about the areas where the project is failing or otherwise.
2. It provides a detailed oversight of diverse aspects of the project, ranging from labor and materials even to the inputs by various contractors in the project.
3. It provides accurate billing records to employer and contractor alike.
For more information on how you can implement a Los Angeles accounting service firm click here.
Enter your e-mail and subscribe to our newsletter