Project Return

Hard Earned Revenue, But Where Is It?



November 21st , 2016

As a leader, you manage multiple projects and programs as part of the organizational strategy execution framework. These projects/programs may be local, regional, or even global. If you are part of a large organization, these initiatives may cut across industry verticals. Your customers insist on different types of contracts based on the nature of the projects/programs.   


Customer Invoices are raised, and payments made depending on the whether the contract is Fixed Price, Cost Plus, or Time & Material.

Let us discuss a project scenario.

You have your project scope, schedules, and budgets in place along with your team members. The plans are approved and baseline.

The projects/programs move into execution phase; your teams work towards completion of project deliverables. This is when a leader turns to bill the clients for services provided. After all, this is one of the important milestones for you who represents the project Performing Organization.

As the project reaches significant milestones, the Project Manager focuses on getting formal acceptance from their clients, have the necessary documents in place and raise customer invoices for work delivered. In most organizations, customer invoices are generated by the finance department after due consultation with project managers. Work proceeds in a similar fashion till all the deliverables are accomplished, and customer invoices are generated.


The Project Manager and the Team are now on top of the world!

And why not? They have done their job after hours and days of toil.


But, wait! Is it all over? May not be!

It is important to realize that there is a world of difference between:

• Revenue

• Revenue Recognition

• Customer Invoicing

• Receiving Revenue

As a project manager, you might be wondering – “Our job is done when we deliver as per the project requirements, and the customer has accepted it formally. Why worry about anything else? Let the finance folks do their job as well!”

In a way, you may be logically correct from a project manager’s point of view. But ponder over this –

“Does your salary come from finishing the project or collecting the money due from the project?”

If you still say, it is not the project manager problem, then you may want to reflect on your attitude –

“Do you think like a Manager or an Owner?”

Your choice will determine how much you grow as a professional!

There are numerous instances when projects have been completed and signed-off but have issues such as:

1. Invoices still not raised

2. Invoices raised but money not received

3. Significantly aged-Invoices

4. No Alerts for (1), (2), (3) above.


What do the above scenarios indicate?

The business term is “Revenue Risk” or “Revenue Leak”, which is a big challenge, especially in medium to large organizations. The ultimate impact is seen in “Project Cash Flow Management” of the enterprise!


The moot points here are –

1. Do you have systems and mechanisms that address Revenue Recognition on your projects effectively and in an integrated and seamless manner?

2. Does your current project management solution address the entire cycle from Customer Quotation to Cash?



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