Not tracking finances….
I have worked in companies who insist on tracking expenses, and others who don’t. I prefer the ones who do. Why?
When you manage a project it is important to have an understanding off all of the criteria. If you don’t, you can’t measure success or failure. You are also doomed to repeat the failures, and rarely some success. This doesn’t mean hiring an accountant and it doesn’t mean counting the change. It does mean looking at how much you spend, how you are spending it and if you are spending too much.
I came into one organisation towards the end of a project, and took it over. To date, no one had measured costs, time had gone over and the invoices for the developers had exceeded £1 Million. A similar project should have cost low hundreds of thousands. No emphasis was put on cost in start up phases of the company and projects, and costs went out of control. Our suppliers would bend over backwards to help out and we’d be hit with an enormous single line invoices at the end of the month. No one knew what we were paying for, but we kept paying it. When some simple cost controls where put into place, including each supplier assigning costs to a project and a work stream we found our invoice amounts decreased by 70%.
In other projects we have worked on, lax cost control has included projects footing the bill for Chauffeured cars for a team member, procuring office furniture (it was a software project) and ballooning costs.
When costs are measured, there is more focus on objectives.