AUA National Conference 2009 Why Dont I go

AUA National Conference 2009 Why Don’t I go Out with the PM Group on Friday Evenings Presented by: Michael J. Brennan, CPA

Qualifications • • Certified Public Accountant Certified Timberline Consultant Certified Axium Consultant 22+ Years Combined Accounting and Consulting Experience • ELE Degree in Human Behavior

We Will Discuss • • • Who are the Employees of the Firm. Examine PM / Principal Behavior. Examine Accounting Behavior. Effects of the Disconnect Between Accounting and Project Team Tips and Tools to Tear Down the Walls that Separate Accounting From the PM Group.

Rules of Engagement • Keep Me Engaged • Ask Questions Any Time • Dissenting Opinions Welcome – avoid extreme examples

Who’s Employed at My Firm? • Professional Staff (Direct) – – Principals Project Managers Engineers / Architects CADD Operators / Designers • Back Office / Support Staff (Indirect) – Accounting – IT, HR, Other

Professional Staff – Who Are They? • Degrees – – – Engineering - Yes Architects - Yes Project Management – Maybe Accounting/Finance - No Any Others?

Accounting Staff – Who Are They? • Degrees – – – Accounting Finance No Degree Liberal Arts Other • How They Got There – Principal’s Relative (wife) – Promoted from other back office position (trust factor) – Specifically Hired – Principal Who Dabbled or Fancies Him/Her Self – Other

Professional Staff - Training Along the Way • Technical - Yes • Project Management – Most Likely – Financial Project Management (maybe) – Technical Project Management (yes) • Financial (divisional) – Rarely • Internal Operations – Almost Never – Typically no program exists – Many times internal operations are not documented – Accounting system (Ajera & Protrax) not understood

Accounting Staff - Training Along the Way • Industry Specific – Rarely – Programs Do Not Exist (Utilization, Earned Value, etc) – School of Hard Knocks – on the Job Training • Project Management – Rarely – Lack of Perceived Need – No Backup in the Office when attendee is away. • Financial – Only to Satisfy CPE (Relevancy) • Internal Operations – Almost Never – Typically no program exists – Many times internal operations are not documented – Accounting system (Ajera & Protrax) not understood

The Vacuum in the Middle Big Little

Professional Staff Realities • Has little or no – – Interest in accounting Accounting training Knowledge of internal operations Time available for financial training

Professional Staff Behaviors • Will – Almost always put project deadline ahead of accounting related deadline – Put off or avoid accounting related tasks – Keep their own project accounting records in a format they understand. (I thought they hated accounting? ) – Submarine on project that has gone bad. – Discount or dismiss the importance of accounting related tasks (timesheets included) in relationship to the completion of the project. – Other?

Accounting Staff Behaviors (Let’s Be Honest Here) • Will – Avoid direct conflict or be too aggressive in conflict resolution (lack of middle ground) – Rarely be proactive • Tends to – Focus on details – does not see big picture – Focus in the wrong areas – Dwell in their caves

A&E Firm’s Natural Progression • Manage Client Relationships • Sell Work • Successful Projects • Positive Interaction with Clients • Quality Design Work Where is Accounting/Back Office Staff? Do you feel left out?

Results of the Vacuum Project Side • Timesheets not completed/approved timely. • Draft bills, change orders, project updates not turned in timely. • Separate or redundant accounting records kept. Accounting Side • Protectionism of the system. • Lack of “trying” because of preconceived failure on the part of PM’s. • Cave dwelling.

Effects of the Vacuum • Strained relationship between accounting and project team. – Meetings tend to be adversarial. – Little trust – Mutual lack of respect • Minimal communication between teams. • Teams operating independently to complete individual agendas. • Animosity or feeling of left out of firm progression.

Who is Your Biggest Problem? Sometimes Most Often ** More Often Than Not so Much **Project Managers? or Engineers/Architects Who Manage Projects?

How to Fill the Vacuum – PM’s • From the project side define as a company – how projects and divisions are to be measured and evaluated. – how PM’s can take ownership of the system. – the role and financial duties of project and divisional managers. – Remedies for failure to execute and rewards for compliance.

Measurement and Evaluation of Projects • Profit evaluation based on budget before project begins – establish baseline • Perform Earned Value Analysis • Periodic / regular project status reviews • Project closeout review

PM Ownership of the System • Update budgets • Maintain key dates – Estimated start / completion dates – Actual start date / completion dates • Maintain Phase/Task status • Maintain % Complete statistics

Defining Roles and Financial Duties of Project and Divisional Managers. • Create and be held accountable for departmental overhead. • Review and approve timesheets for direct report employees. • Proactive management of the overhead budget (utilization and expense control) • Adhere to company policy regarding expenses

Remedies for Failure to Execute and Rewards for Compliance • Well defined incentive compensation plan for project performance. • Well defined incentive compensation plan for managing departmental overhead. • Clearly defined penalties for non responsive behavior. • Failure to maintain system data is self regulating

How Do We Fill the Vacuum - Accounting • Don’t make every “touch” with the PM group a negative touch. • Don’t “Rat Hole” requests for special reports or data on a project. (this is an opportunity to foster teamwork) • Ask about any offline accounting they are performing and offer work with them to produce it out of Protrax. • Attend project status meetings – Absorb what taking place and documents discussed – Make suggestions for improving processes. • Create and document internal training programs for PM’s – Understanding your reports – Understanding the system (Std cost, Earned Value, etc) – Understanding Your Role as a Project Manager (using company policy)

• Questions?

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