What are the common risks and challenges faced by project accountants vs general accountants?

1 Scope changes

One of the most common risks and challenges faced by project accountants is dealing with scope changes. Scope changes are alterations or additions to the original project plan that affect the project scope, deliverables, timeline, or resources. Scope changes can have a significant impact on the project budget, revenue, and costs, and require project accountants to adjust their accounting records accordingly. However, scope changes can also create confusion, disputes, and delays in the project accounting process, especially if they are not properly documented, approved, and communicated. To mitigate this risk, project accountants should establish clear and consistent procedures for handling scope changes, and ensure that they are aligned with the project contract, the project manager, and the client.

3 Cost allocation

A third common risk and challenge faced by project accountants is cost allocation. Cost allocation is the process of assigning and distributing the direct and indirect costs of a project to the appropriate cost objects, such as activities, tasks, or outputs. Cost allocation is important for measuring and controlling the project profitability, efficiency, and performance. However, cost allocation can also be challenging and contentious, especially for indirect costs, such as overhead, administration, or shared resources. Project accountants need to use reasonable and consistent methods for allocating indirect costs, and ensure that they are transparent and fair to all parties involved in the project.

4 Compliance and audit

A fourth common risk and challenge faced by project accountants is compliance and audit. Compliance and audit are the processes of ensuring that the project accounting records and reports comply with the relevant accounting standards, regulations, and contractual obligations. Compliance and audit are essential for maintaining the quality, accuracy, and integrity of the project accounting information, and for avoiding legal or financial penalties or disputes. However, compliance and audit can also be demanding and stressful for project accountants, as they require them to adhere to strict rules and deadlines, and to provide sufficient evidence and documentation to support their accounting decisions. Project accountants need to stay updated and informed of the applicable accounting standards, regulations, and contractual obligations, and to implement effective internal controls and checks to ensure compliance and audit readiness.

5 Communication and collaboration

A fifth common risk and challenge faced by project accountants is communication and collaboration. Communication and collaboration are the processes of exchanging and sharing information and ideas with the project team, the client, and other stakeholders. Communication and collaboration are crucial for ensuring that the project accounting information is timely, relevant, and useful for decision making and reporting. However, communication and collaboration can also be difficult and problematic for project accountants, as they may encounter barriers such as language, culture, distance, or technology. Project accountants need to use clear and concise language, adapt to different communication styles and preferences, and leverage appropriate communication tools and channels to facilitate communication and collaboration.

6 Professional development

A sixth common risk and challenge faced by project accountants is professional development. Professional development is the process of acquiring and updating the knowledge, skills, and competencies required for performing the project accounting role effectively and efficiently. Professional development is important for enhancing the quality, value, and credibility of the project accounting services, and for advancing the career prospects and opportunities of the project accountants. However, professional development can also be challenging and costly for project accountants, as they may face constraints such as time, budget, or availability of training or mentoring resources. Project accountants need to identify and pursue their professional development goals and needs, and to seek out and utilize the available training or mentoring resources.

7 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?