Some differences between project management and accounting perspectives on project cost control


By Alan Stretton 

Sydney, Australia


This short commentary discusses some differences in perception and practice between project managers and accountants in relation to cost and financial management of projects.

Conventional accounting records incomes and expenditures as they pass through the accounting books. From the point of view of project financial and cost control, this does not, in itself, provide a basis for cash flow control, nor for some aspects of cost control.

The facility to forecast future cash flows and future costs is required, and this is best catered for by having a separate project control system which facilitates such forecasting. This is often resisted by accountants, until (or if) the logic and means of reconciling it with conventional accounts is accepted.

This article discusses aspects of such a separate control system, including commitment costing for procurement items, and use of a specifically detailed WBS for dealing with the percentage complete problem for non-procurement items. 


This commentary discusses some of the issues I have experienced over the years in reconciling differences in perspectives between accountants and project managers regarding cost and financial management of projects.

Project managers and accountants tend to have quite different perceptions of what is important in the context of project cost and financial controls. These are what I have called (e.g. in Stretton 2013c) legitimately conflicting perceptions, in the sense that both are right in respect of their own particular responsibilities. If each understands the legitimately different perspective of the other, then working smoothly together becomes much less of a problem. It has often been my task to explain project management perspectives to accountants, and to involve them in incorporating these into expanded formal financial and cost control systems. The following reflects on some of these differences of perspectives. 


To read entire paper (click here)



About the Author

flag-australiaalan strettonAlan Stretton, PhD     

Faculty Corps, University of Management

and Technology, Arlington, VA (USA)

Life Fellow, AIPM (Australia) 

Alan Stretton is one of the pioneers of modern project management.  He is currently a member of the Faculty Corps for the University of Management & Technology (UMT), USA.  In 2006 he retired from a position as Adjunct Professor of Project Management in the Faculty of Design, Architecture and Building at the University of Technology, Sydney (UTS), Australia, which he joined in 1988 to develop and deliver a Master of Project Management program.   Prior to joining UTS, Mr. Stretton worked in the building and construction industries in Australia, New Zealand and the USA for some 38 years, which included the project management of construction, R&D, introduction of information and control systems, internal management education programs and organizational change projects.  He has degrees in Civil Engineering (BE, Tasmania) and Mathematics (MA, Oxford), and an honorary PhD in strategy, programme and project management (ESC, Lille, France).  Alan was Chairman of the Standards (PMBOK) Committee of the Project Management Institute (PMI®) from late 1989 to early 1992.  He held a similar position with the Australian Institute of Project Management (AIPM), and was elected a Life Fellow of AIPM in 1996.  He was a member of the Core Working Group in the development of the Australian National Competency Standards for Project Management.  He has published over 140 professional articles and papers, many of which can now be found in the PM World Library.  Alan can be contacted at [email protected].