How do you reconcile AC and EVM data with accounting and financial systems?

1 Define the scope of AC

The first step is to define the scope of AC for your project. This means identifying what costs are included and excluded from AC, and how they are categorized and allocated. For example, you may decide to include direct costs, such as labor, materials, and equipment, but exclude indirect costs, such as overhead, taxes, and depreciation. You may also decide how to allocate shared costs, such as rent, utilities, and insurance, among different projects or activities. You should document your scope of AC and communicate it to your project team, stakeholders, and accounting and financial staff.

2 Establish the source of AC

The next step is to establish the source of AC for your project. This means determining where and how you will collect, record, and report the AC data. You may use different sources of AC, such as invoices, receipts, timesheets, purchase orders, or expense reports. You should ensure that the source of AC is reliable, verifiable, and timely. You should also ensure that the source of AC is compatible and integrated with the accounting and financial systems of your organization. For example, you may use a software tool that can import and export data from the accounting and financial systems, or you may use a manual process that can reconcile and adjust the data.

3 Apply the AC formula

The third step is to apply the AC formula for your project. This means calculating the AC for each period, activity, or deliverable of your project. The AC formula is simple: AC = Total Cost - Cost Variance. Total Cost is the sum of all the costs incurred for the project so far. Cost Variance is the difference between EV and AC. EV is the value of the work completed so far, based on the project plan and budget. By applying the AC formula, you can measure how much your project is over or under budget, and adjust your project plan accordingly.

4 Review and validate the AC data

The final step is to review and validate the AC data for your project. This means checking the accuracy, completeness, and consistency of the AC data, and resolving any discrepancies or errors. You should review and validate the AC data regularly, preferably at the same time as you update the EV and PV data. You should also compare and reconcile the AC data with the accounting and financial systems of your organization, and ensure that they are aligned and balanced. You should document and report any changes or corrections to the AC data, and explain the reasons and impacts.

By following these steps, you can reconcile AC and EVM data with accounting and financial systems, and improve your project management skills and results.

5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?