Project Cost Management: Using Software to Assist in Cost Management

Most organizations use software to assist in various activities related to project cost management. Spreadsheets are a common tool for performing resource planning, cost estimating, cost budgeting, and cost control. Many companies also use more sophisticated and centralized financial applications software to provide important cost-related information to accounting and finance personnel. This section will focus specifically on how you can use project management software in cost management. Google “brief guide to the cost management features in Microsoft Project”.

Project management software can be a very helpful tool during each project cost management process. It can help you study overall project information or focus on tasks that are over a specified cost limit. You can use the software to assign costs to resources and tasks, prepare cost estimates, develop cost bud gets, and monitor cost performance. Microsoft Project 2000 has several stan dard cost reports: cash flow, budget, over budget tasks, over budget resources, and earned value reports. For several of these reports, you must enter percent age completion information and actual costs, just as you need this information when manually calculating earned value or other analyses.

Although Microsoft Project has a fair amount of cost-management features, many information technology project managers use other tools to manage cost information; they do not know that they can use Microsoft Project for cost management. As with most software packages, users need training to use the software effectively and understand the features available. Instead of using dedicated project management software for cost management, some information technology project managers use company accounting systems; others use spreadsheet software to achieve more flexibility. Project managers who use other software often do so because these other systems are more generally accepted in their organizations and more people know how to use them. On the other hand, some companies have developed methods to link data between their project management software and their main accounting software systems.