Finance Module Tutorial

How do I manage the finance and accounting of a small-medium project-oriented company ?

The following tutorial explains you the financial model of ]po[. It uses the example of a small translation agency that manages its finance using a number of MS-Excel sheets. These sheets represent the financial model of ]po[, just without a database.

Don't worry If your company is a SME in a different sector. Project-oriented organizations tend to be very similar, so you probably can use the same model without changes. I have actually taken a lot of my sample material from a strategic consulting company and a IT consultancy...

The Case: Tigerpond S.L.

"Tigerpond Translations S.L." is a privately held "limited company" (American: Inc., Spanish, French, Italian: S.L., German: GmbH, etc.). Tigerpond has some 10 full-time employees and customers and provider in several countries.

In the following sections we are going through a number of Excel tables (here as HTML tables), each dealing with a specific aspect of the company. These tables are represented in ]po[ as "packages" of the finance module.

Invoices for January 2003

The table below shows a ficticious list of invoices for January 2003. Each invoice consists of a number of "Invoice Lines" with a "TaskType" field (for Data Warehouse analysis), a "Unit", a "Price/Unit" and a "Currency". The Invoice Items are summed up to form the final invoice amount.
To deal with multiple invoice currencies we included a column with the eschange rate (at the time of invoicing ) in order to calculate the estimated EUR amount of the invoice. There will always be a difference between invoice amount and the cash received in your account because of currency rate differences. However, that's ok, you just have to accept it and you have to separate clearly between invoices and payments...

• The table below doesn't contain a VAT (value added tax) column. VAT is added to the invoice amount if you are selling within your own country. In our example below, only "Mountain Translations" is located in the same country, so we have to charge them 16% more. However, we will have to return this money either by paying VAT to our providers or at the end of the year.

Related Links:

• See the Invoices package for details about the implementation of this table in ]po[.
• Download the MS-Excel sheet containing this table.

Payroll and Human Resources Costs

The larges single cost element in all project-related organizations is "human capital".

• The payroll information below includes a column for social security which only applies in Europe as far as I know
• "Other" costs include optional packages such as a health or retirement plant, company car etc. Some of these items need to be included in the social security, but other don't. So we have got one column "Other (inc. SS)" that add to SS, and a second colument "Other (no SS)" that doesn't. Examples are a company car for the senior managers (156€/month) and a supplementary retirement plant (200€/month).