Can Project Management and Accounting Talk?

By Jim Jordan

Jim Jordan is director of construction services for Dallas/Fort Worth-based Weaver and Tidwell LLP.

Of course project management and accounting personnel talk, but do they really understand each other? Within a company everyone is on the same team, and they should always strive for better communication. While this sounds good, sometimes it is hard to achieve.

Project management and accounting as well as other administrative personnel are trained to perform vastly different jobs, each having a unique terminology. This makes understanding each other a challenge when they meet and talk about jobs, accounting and administrative issues.

Tragically, some companies only give lip service to the idea of open communication between departments. It takes everyone working together to make a contracting firm successful, and if you, as a leader, can foster effective communication, it can make for a more profitable business.

Unfortunately, some people think they communicate well, when in fact they just "talk" - which is not the same thing. Listening is, in many ways, far more important to the communication process, and some people simply don't listen because they are too busy talking. Thus, they are likely to repeat the same errors day in and day out. Moreover, with the high turnover of personnel in our industry, problems get re-created on an ongoing basis, partially due to a lack of communication.

In our business, it's particularly important for project managers to understand and communicate with a contractor's accounting team and vice versa. Certainly, neither group needs to master the tasks or even the lingo of the other, but since financials are so closely tied to the job's progress, some basic reciprocal knowledge is necessary. Project managers want to be outside on the job site where the action is, while accountants by necessity spend most of their time in the main office. So "if never the twain shall meet," how can senior management facilitate a more open and effective line of communication between these groups?

Here are some suggestions:

Take a field trip - Require your main office personnel to visit job sites, perhaps once a quarter, to observe what's going on in the field. This helps them gain an understanding of the types of problems the superintendents and project managers face on a daily basis. It brings a "flesh-and-blood" viewpoint, far beyond the financial numbers, to a job in progress and also helps the two groups put names to faces. When staff is in the office all the time, they often don't develop a broad perspective of the company. Field visits will help gain this perspective.

Bring your project managers to the office - As part of their ongoing training, your project managers should periodically visit accountants at the main office to see what they do and how they do it. For example, every PM estimates the final profit to be earned at completion of the job, but does he or she understand what the financial team does with that estimated fee? Does the PM understand how it affects the company? The project managers could definitely benefit from periodic classes on financial topics such as cash flow and work-in-progress reporting.

Spread the word - Your accountants may not know as much about construction techniques as they could or as they might desire. Encourage them to expand their knowledge about the construction world and to participate in an industry association offering classes or forums. The Construction Financial Management Association provides a wealth of information, including a monthly magazine containing articles that zero in on important issues impacting the construction industry.

In addition, internal communication must always be:

Truthful - For example, a project manager might withhold the fact that his or her job may be losing money and may not fully understand the eventual consequences to the company of this concealment. It may create problems down the line with the contractor's bank or Surety Company.

Thoughtful - When interacting with others, you should choose and understand not only the words, but the intent of the message. Also, listen closely and respect what the other person is saying, even if you don't agree. The goal is not to prove who can put on a better "show," it's to create a healthy dialogue and work in concert to make the company successful.

Remember, everyone's best interests are served by keeping the lines of communication open.