Project accounting

Project accounting (sometimes referred to as job cost accounting) is the practice of creating financial reports specifically designed to track the financial progress of projects, which can then be used by managers to aid project management.

Standard accounting is primarily aimed at monitoring financial progress of organizational elements (geographical or functional departments, divisions and the enterprise as a whole) over defined time periods (mkkj weeks, months, quarters and years).

In Australia, project accounting workers earn up to an average AU$79,725 per year. Most people working in this field move to a different position after approximately 20 years. The jobs that normally increase pay towards this job is Budget Managing and Cost Accounting.

Projects differ in that they frequently cross organisational boundaries, may last for anything from a few days or weeks to a number of years, during which time budgets may also be revised many times. They may also be one of a number of projects that make up a larger overall project or program.

Consequently, in a project management environment costs (both direct and overhead) and revenues are also allocated to projects, which may be subdivided into a work breakdown structure, and grouped together into project hierarchies. Project accounting permits reporting at any such level that has been defined, and often allows comparison with historical as well as current budgets.

Project accounting is commonly used by government contractors, where the ability to account for costs by contract (and sometimes contract line item, or CLIN) is usually a requirement for interim payments.

Percentage-of-completion is frequently independently assessed by a project manager. It includes the continuous recognition of revenues and income related to longer-term projects. By doing this, the seller is able to identify some gain or loss relevant to a project in every accounting period that is ongoing active. Funding advances and actual-to-budget cost variances are calculated using the project budget adjusted to percent-of-completion.

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