Effective Project Financial Management Tools Case Study

in force(p) retch Financial Management Tools - Case Study ExampleHowever the above mentioned studies will non be discussed in details. This paper will only evaluate the effectiveness of using speak to estimations and compute in financial worry find of the two companies.Project financial management is a treat which brings together planning, budgeting, accounting, financial reporting, internal control, auditing, procurement, disbursement and the physical performance of the drop with the aim of managing project resources decent and achieving the projects development objectives (world bank group). Financial management is the main character for the success of a project process. An absolute and relevant financial information provides a basis for better decisions, thus speeding up the fare of the project and the availability of the funds. An effective financial management provides the followingAn effective financial management dodging is vital for projects because of the need t o deliver services to target groups quickly over a large geographic area to a wide variety of stakeholders. One of the tools in financial management that is widely utilize is the Cost estimation and budget. Budgets are the financial work plan for projects, programs and organizations. Budgets that work are based on realistic assumptions, use good cost estimates and come from organizational processes that include board and staff members (J. Rouse, P.Rouse). Project financial management processes are organized into five groups of one or more processes each Initiating processes-authorizing the project or phase.Planning processes-defining and refining objectives and selecting the best of the alternative courses of action to attain the objectives that the project was undertaken to address.Executing processes-coordinating large number and other resources to carry out the plan.Controlling processes-ensuring that project objectives are met by monitoring and measuring fall out regularly to identify variances from plan so that corrective action can be taken when necessary. finale processes-formalizing acceptance of the project or phase and bringing it to an orderly end.Cost Estimations and Budgets In the financial management done by the ISS (International Space Station) for NASA has shown that the cost growth is contributed to many factors that are beyond the control of the project manager. The Project Manager was not able to clearly communicate the justification for his budget requests and the rationale for the cost growth because NASA has lacked a single standardized accounting system and the program has not developed and retained a baseline lifecycle cost estimate. Past efforts to control costs through budgetary constraints have failed to grasp their stated purpose and have probably exacerbated the cost growth. The Arizona Department of Transportation (ADOT) was not able to determine the reasons for the cost increases because the data is not readily available fr om the Federal Highway Administration.