Everyone know’s the delivery cycle; you pitch for the work, you win the work, you do the work, you move onto the next piece of work. However, very few businesses actually review the work once it’s completed – and even the ones who do don’t do a financial review.
However, having a financial overview of a project can help identify whether the project was successful from a numbers perspective. Even more so, taking this data from an accurate project management system allows you to drill down even further if required.
What to Track
In the first instance, keep it simple. If you don’t have access to accurate ‘cost per hour’ data (i.e. what each of your employee costs your business per hour they work) then use a blended rate. Ideally though, you’ll have a cost per hour per employee, and your Project Management system will have the ability for you to add these against employees and therefore automatically calculate the cost for you. Let’s use a blended rate of £30 an hour in this example. We’ve just completed a £30k project with £2k freelance costs that we’d estimated would take 280 internal hours to complete. Here’s what the financial summary shows:
As we can see from the summary, it’s taken us 120 hours more to complete than we estimated. Clearly, this project needs further investigation. By looking deeper into the time tracked on the project we’ll be able to identify where we’ve gone over. The next step is to set up a quick discussion with those involved with the project to review why we’ve gone over our estimated hours. This needs to be communicated as an opportunity to improve and not a witch hunt. What’s gone has gone, it’s now about improving for next time.
Take Action
Once you’ve had the discussion with the team, it’s time to take action. In your meeting, agree a few action points and most importantly agree who’s responsible for each and set a deadline. Whether it’s further training, scoping improvements, communication with clients, internal communication or improving processes, make sure the actions are documented and followed up on.
If you’d like any help or support getting started with project wrap ups, get in touch on 07866200275 or email martyn@agencycfo.co.uk.
