If
You're a Project-oriented Business...
Your systems and business
processes can depend on a less complex, more industry-standard
Chart of Accounts
In most project-oriented businesses, either
one, two, or a combination of problems are typically encountered.
- Typically, there are inadequate
project reporting and inflexible project accounting structures,
such as a Work Breakdown Structure (WBS). This limits the
information provided to program/project managers for supporting
project reporting.
- The project structure uses a
mandatory WBS that is driving complexity into the GL chart
of accounts by incorporating the project/WBS number within
the GL account number.
- To make matters worse, this creates
additional complexities and uniqueness within the computer
system, and typically imposes additional recording requirements
upon the operational departments.
Why Project-oriented
Companies Face these Problems
The reasons for these maladies are two-fold.
- First of all, computer systems
are at the root of the problem because they are archaic,
complicated, inadequate, and unable to be patched because
their core architectures are significantly flawed.
- Within such systems, there are
usually a series of batch programs that cull data from the
costed general ledger transaction for use by program management
to implement Earned Value Reporting, the basis for measuring
projects such as comparing Estimate at Completion to Budget
at Completion at both a project and sub-project level.
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