Control Account & its importance in Project Control

Control Account and its importance in Project Control

According to the Project Management Body of Knowledge “PMBOK Guide Third Edition”, a Control Account is defined as, “Control Account is a tool (CA). A management control point where the integration of scope, budget, actual cost and schedule takes place, and where the measurement of performance will occur. Each control account is associated with a specific single organizational component in the organizational breakdown structure (OBS)”

Control Account Plan (CAP) is a tool. A plan for all of the work and effort to be performed in a control account. Each CAP has a definitive scope of work, schedule and time-phased budget.

"One penny may seem to you a very insignificant think, but it is the?small seed from which fortunes spring" - Orison Swett Marden

?What is The Purpose of Having Control Accounts?

A Control Account is a general ledger account designed to document and summarize bulk transactions of a similar type.

Role of CA in the Enterprise Project Structure (EPS) and Work Breakdown Structure (WBS) combination. A control account is a division of a work package, an agreement between a project manager and a group, discipline, organization, or company (organizational unit) to perform all work for that organizational unit. A control account divides work packages into manageable work packages that are executed by a specific organizational unit or single manager.

The intent is to assign/assign a specific scope to an individual or group of people measure cost and schedule performance against plans. This allows for accountability and responsibility for delivery of specific scope items an example, an item on a master shipping list with specific costs and shipping schedules. Each work package must have at least one control account.

Another way to view control accounts is in a Work Breakdown Structure (WBS)/Organizational Structure Plan (OSP) or Responsibility Allocation Matrix, where each cell is a control account. A control account may include a single result or multiple results, and sufficient time has been taken to measure its progress and identify trends that can be used to influence the results of that control account. must be secured for medium to large projects, it has been highly recommended to have a reconciliation account length of 8 to 24 months, although this is only a guideline.

Larger grouping of items with fewer reconciliation accounts makes it easier to manage reconciliation accounts. Reconciliation accounts should be created by people familiar with the work to be done and set to appropriate levels for a particular project. Earned Value is applied at the Control Account level. If the control account is established first, the project manager charges the control account for costs and establishes its revenue rules. Expense Burden provides tools for creating detailed baselines of reconciliation accounts or plans for accurately completing work.

The nature of the fee varies depending on the project, its size, complexity, and stage of completion, and can range from a single item, to a billing breakdown for each item by time and rate, to a list of payment items and units. price. Merit rules are role/resource independent and are steps executed with a weight assigned to each step that totals 100% of the control account's budget. If multiple profits are assigned to reconciliation accounts, each performance contributes to the total control account. This provides an objective way of measuring physical progress. As work progresses, actual costs are recorded and compared to plans. Control accounts are key to revenue value analysis.

"Watch the pennies and the dollars will take care of themselves" - Benjamin Franklin

?How to measure Control Account

The control account can be measurable with the size of the project, helping project managers reduce costs. Disproportionate time tracking numerous reconciliation accounts for a project. It does not justify this level of detailed control.

Control accounts can be measured as follows:

Many or all services provided by an organizational unit deployment. Project managers continue to track deliverables from organizational units.

The key CA team head retain responsibility for the services provided. For example, the need of only a small paving project, the Design control account, Individual achievements can be included in one control account. Earning rules are established for rewards within the control account.

This greatly simplifies the administrative effort required to maintain project records, which provides the reporting data you need to roll up all your projects. Project managers still have to Provides progress reports and tracks schedules and costs, but instead only covers a few items

Hundreds or thousands in large projects. Specific codes are assigned to project items, allow them to be individually identified and tracked as well.

"If you look after the pennies, the dollars will look after themselves" -J. Paul Getty

Utilitarian value of Control Account - Project sample

Big roadway project: For example; you can set up reconciliation accounts for Environmental Impact Statements (EIS) during the design phase of a major highway project. This is specific to a group. responsible for a set of related deliverables with assigned scope, schedule and budget.

Another example is engineering project deliverables (process unit), this is another example related services provided by the engineering team in the project group. ?The work packages are different, and corresponding deliverable lists are unique, it makes sense to have a separate controller because the accounts in this case differ in the nature and nature of the benefits.

Both engineering activities, electrical equipment delivery projects examples of reconciliation accounts during the design phase of the internal sequencing project include, performing the whole "design" work assuming all the work is done internally by the same group. If since there are multiple groups working on it, each group should have its own controlling account. in one a small short-term project. It usually doesn't make sense to subdivide a design small work package. The entire design can be tracked in one control account. schedule Deliverables can be identified and reflected at a higher level of detail, but costs are tracked control account level.

Recommended level of breakdown under major Control account level:

The work breakdown of work doesn’t stop at the Control Account. It can continue down to as low a level as project management desires. The way in which it works breaks down will vary depending upon what management function is being performed. For example, if performing scheduling functions, the Control Account would then be broken down into the groups of tasks, and then the tasks themselves. Even the individual tasks can be broken down into steps needed to complete the tasks. If performing cost management functions and earned value analysis, the Control Account could breakdown into the deliverables, which would breakdown into the cost elements, which could be pay items or resources. The cost elements should have consistent earning rules applied by deliverable type. If performing document control functions the Control Account would breakdown into a detailed coding and filing structure.

Remember, as you think so you become, your success rate on usage of CA is more you break your spending into the minimal level, "How I am going to spend even my 1 dollar on my project?", if you have justification for this question, that is the best way to monitor and control your progress of the project.

Remember, your effective Spending plan is the key to success on Revenue?Generation

"A penny saved is better than a penny earned" -Martin Luther

Authors: Vijayarengan Chockalingam & Ilam Parithi

#controlaccount #costcontrol #costmanagement #projectmanagement #projectcontrol #budgetcontrol #projectplanning #disputeavoidancce

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