What Are Project Financials?
Project financials center around controlling the following.
Project Costs
Project costs refer to the total funds that a project requires. This includes direct costs, such as fixed labor, materials and equipment, as well as indirect costs that include utilities and quality control, among other things.
Project Revenue
Project revenue is what a project is expected to earn. It’s estimated by looking at historical data, such as past performance and using that information to predict future performance. It can be represented by target revenue, which is what the project is expected to earn and actual billing, what you bill your customer. It can also include the estimate at the completion of project billing, which is actual billing and the remaining labor billing which is planned billable expenses plus flat fees for all unfinished activities.
Project Profit
is the total amount of money that the project earns after expenses. Net profit for a project is the gross profit minus operating expenses and taxes. Project Funding Sources
Project funding sources can come from many different sources. For example, debt is when those funds are raised from lenders. Companies can also issue bonds and sell them for funding. Equity financing is when a developer raises private equity funds. They can also get loans to finance the project.
Project Cash Flows
refer to cash moving in and out of an organization and determine the project’s rate of return or value. This money can be used to fund the project.