Several organizations have found that bringing financial management staff onto the project management team results in heaven-sent synergies.

In Zweig Group’s consulting practice, we see many firms grapple with the interface between project managers and financial management staff. It sometimes feels like there is a distinct difference in thinking, approach, processing of information, and communication. It’s almost as if, to coin a well-known book, “Project Managers are from Mars, Financial Management Staff is from Venus”! Best-practice firms that value the technical staff for their expertise and the administrative staff for theirs often find powerful synergies develop between the project managers and the financial management staff. In some cases, these connections are so powerful that the financial team integrates into the project team, supports and leverages the project managers’ time, and adds tremendous value to the team and the firm, and contributes to the success of both. The starting point of these synergies lies in a clearly delineated organizational structure within the firm in approaching client relations:

• Principal in Charge - Firm -> Client PIC
• Project Manager - Firm -> Client PM
• Financial Staff - Firm -> Client Financial Staff

Architectural, engineering, and planning schools do not place a great deal of emphasis on the financial and management aspects of firm management. Most technical professionals that we encounter are reluctant to deal with the financial aspects of contracts, fees, and collections. Who better to hand those responsibilities to than the folks who like to deal with dollars? This relationship is communicated and clearly defined during project kick-off, when the contract is reviewed with the client for scope, schedule, and fees. It is critical during that meeting that the financial staff and elements of the project are introduced and defined. The firm’s PM and PIC should walk away from the kick-off meeting with the client’s financial team members’ names, phone numbers, and email address. This allows the firm’s financial staff to immediately connect to the clients staff and work out all the contractual details: how the project will be tracked, what the invoice format and required contractual constraints are, and when the invoice is due to the client for review and payment. The process also establishes a dialogue that is invaluable during the duration of the project. The financial team is also best adept to manage the collection process for the firm, as they have the relationship with the client’s financial staff. Working with the PM, the financial staff can quickly flag when things are starting to go south with the client. With the firm adopting a clearly defined billing and collection process, the financial staff allows the PM to remain the prime client relations manager. The following process allows for clearly defined expectations and mitigates risk of nonpayment by the client. This is clearly dependent on client contractual terms and applies to both new and existing clients as a standard operating procedure:

• Day 1: Monthly close of firm’s financial data produces invoice draft review; allow one to two days for PM review.
• Day 5: All invoices are emailed to client (or uploaded to client defined site). If contractual requirement is to create physical copies, the financial team emails all invoices in addition to hard-copies.
• Day 10: A/E/P firm’s financial staff emails client’s financial staff to confirm receipt and request a date when payment will be made.
• Days 30-35: A/E/P firm’s financial staff reviews aging status; call is made if payment is not received.
• Day 35: A/E/P financial staff asks PM to contact client’s PM.
• Day 37: A/E/P PM determines there is an issue, reviews with PIC.
• Day 40: A/E/P PIC contacts client’s PIC for clarification; if positive, he/she requests date and amount of check.
• Day 45: A/E/P financial staff advises PIC and PM on nonpayment. ​
• Day 45: A/E/P PIC stops services until resolution is clear.

Often, this process does not occur until 90 days. By that time, the damage could be done, deliverables turned over, and resolution unreachable, if there is a problem with this client. One of the more valuable ways firms integrate the financial staff into the project management process is by utilizing them in the role of assisting the PM with project controls. This role leverages the PM by allowing the project controls staff members to assist in the financial management of the project. They become adept at the project scope, schedule, and resource allocation management. They are full billable, working with multiple PMs and multiple projects, and allow the PM to focus on managing the project team and the client. Firms that integrate this role find it to be invaluable, because the PM is able to focus on his/her expertise. This was recently illustrated with a client who integrated Newforma as a project management tool that interfaced with Deltek Vision. They had implemented the Newforma tool, to the degree that all fee planning, scheduling, and resource allocation were done by the financial control staff during the proposal and fully integrated with Deltek. Once the project was awarded, the PM tweaked the system with staff, addressed any changes in scope and fee based on contract review with the client, and the project was part of the firm’s backlog for weekly review. Staffing was defined for each team, office, and the firm, and the predictability allowed senior leadership to make resource decisions for new staff, computer hardware and software, and other equipment needs. The system also assisted in the evaluation of the pipeline of opportunities and the modeling of a predictable cash-flow review each week for the life of the project. The project controls staff provided accurate input of all information, which made the firm highly fluid in its decision making process. Imagine that: One point of entry, fully integrated! When synergy develops between PMs and financial staff, it’s truly a match made in heaven! Ted Maziejka is a Zweig Group finance and management consultant. Contact him at tmaziejka@zweiggroup.com. ​© Copyright 2015. Zweig Group. All rights reserved.