 allocating or apportioning these to the project accountingsystem.

 Forecasting of costs to complete the project. Key stakeholders are often

not only focused on the costs incurred to date, but also those committed
and the expected finalcost.
Projects differ from the day-to-day business-as-usual activities in that they
frequently cross organizational 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 orprogram.

Consequently, in a project accounting, 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 control is another essential accounting procedure. Any deviations from the
project plan affect the project‘s bottom line. Project control can achieve significant
cost savings during the planning and design phase, as well as in the advanced
stages of the project. Therefore, it is the project manager‘s main role to help
achieve the best setup and development of the project plan. It‘s the project
accountant‘s role to ensure the project financials such as billing and revenue are set
up correctly to match the contract terms for the project. They need to fulfill this
plan before they start to identify and mitigate changes later.

Project accounting also focuses on resource management. Every project requires

internal resources, external resources and in some cases, third-party material costs.
Project managers should track their resources closely to avoid spiraling costs,
which is known as time and materials.

Although most of the concepts in the traditional financial and management

 accounting are also applicable to project accounting, there are minor differences.
Project accounting sets itself apart from standard accounting by using different
systems, processes and reporting standards. These include:

Separate System of Accounting: This process is m