Project Management Accounting: Budgeting, Tracking, and ... (ISBN 0470044691)

Project Management Accounting - Clear and To the Point:
As a CIO and an explorer of ways to drive business performance, I highly recommend this book. Unlike many accounting textbooks that contain hundreds of pages of formulas and such, Project Management Accounting is concise and easy to read, but contains powerful information that can be applied immediately in most business contexts. Not only will this book be useful to project managers, but many business managers will find the chapters on the relationship between project management and business practice useful as well. There are 7 chapters in the book, and each chapter can stand on its own as a summary of the topic covered, but taken in sequence, the book presents a comprehensive overview of the interaction between business accounting and finance and project management. The first chapter sets the stage by providing an overview of project management practice. Most project management practitioners will find that this chapter covers all of the basics in a brief way. Business managers who lack background in project management will find this high level presentation an easy introduction to the major subject areas of project management. Chapters 2 and 3 form the foundation for project managers to how company accounting and finance function through the use of the Dupont Method of analysis. Chapter 2 provides a basic introduction to the Dupont Method, with illustrations and tables that guide the reader through the definitions of critical financial ratios and what they reveal. Chapter 3 provides a case study that reinforces Chapter 2, while providing a detailed study of a company's current financial status. In addition, the authors provide guidelines on how analyze business decisions made to improve a company's performance. The analysis and guidelines can easily be applied by the reader to any other company. The next 3 chapters cover individual topics: Cost, Project Financing and Project Revenue and Cash Flows. In Chapter 4, Callahan, Stetz and Brooks clearly explain the difference between concept of cost and that of expense, crucial to understanding why project budgets often go awry. In Chapters 5 and 6, the authors illustrate how the manner in which a project is financed effects the final outcome and value of a project. In addition, they provide an easy to understand checklist that the reader can use to guide a decision when trying to prioritize and choose between projects. Chapter 7 ties the book together with a comprehensive case study that begins with a Dupont analysis to determine the financial health of a company and leads to making business decisions to improve company performance. Of particular interest in this chapter is the use of "pro forma" financial statements to compare the affect of various solutions on potential company performance. The authors conclude the book with a clear method to determine if project performance is enhancing business performance or not. In addition to project managers, many financial managers will find this chapter useful in judging whether or not to continue a particular project. Have you ever had to make that tough call of whether or not to keep putting more money into a project that has so far not lived up to expectations?