What project accounting is
Project accounting is the practice of tracking, managing, and reporting money at project level, rather than only at business, department, or cost-centre level.
Regular accounting answers questions like:
How much revenue did the business earn?
What costs did the business incur?
Did the business make a profit?
What does the balance sheet look like?
What taxes, statutory reports, or management accounts do leaders need?
Project accounting answers more specific delivery questions like:
Is this project profitable?
Are we spending faster than planned?
Are we recovering our costs?
Has the client been billed correctly?
How much work have people done that we have not yet invoiced?
Which project activities are driving cost?
What financial risk does this project create?
Regular accounting looks at the financial health of the organisation. Project accounting looks at the financial health of individual projects.