Introduction

Managing a project’s finances is essential to delivering a successful project. It’s more than just keeping up with costs. There’s a lot of planning, managing and tracking involved.

But what exactly is financial project management? We’ll get to that and define the various project financials before getting into the process of managing a project’s finances. Then, to help you get started, we’ll have a few free financial management templates you can download.

What Is Project Financial Management?

Project financial management is the process of controlling the financial aspect of a project, such as its cost, revenue and profit. To do this requires planning, estimating, budgeting, funding, managing project expenses and billing.

The budgeting part of project financial management is by far the most important aspect of this process. Being able to effectively manage the budget over the life cycle of the project and making sure that all the planned tasks are completed without having to overspend is critical to the successful delivery of the project.

The importance of project financial management cannot be underestimated. It will help manage the overall project better and positively impact business growth. That’s because it balances the investment in the project with the expected return on that investment.

Other benefits include helping track progress with financial metrics, identifying and prioritizing projects that have a higher return on investment and managing project scope and cost overruns. It can also be helpful with improving resource management capabilities by better allocating resources based on your business’s strategic goals.

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