For project-based service businesses, profitability depends on precision. Every hour, resource and expense impacts margins. Without clear visibility from the initial estimate through to invoicing, projects can quickly drift off budget and erode profitability. The challenge is not just tracking costs but ensuring cash flow remains positive throughout the project lifecycle.
Microsoft Dynamics 365 Business Central provides a comprehensive toolkit for managing projects end-to-end. With jobs, resources, timesheets and work-in-progress (WIP) accounting, businesses can monitor performance, control margins and keep projects cash-positive. This blog explores how Business Central helps project-based organisations achieve financial control and operational efficiency.
Why margin control matters for project services
Margins in project-based services are often tight. A small overrun in labour or materials can wipe out profit. According to Forrester, businesses that adopt integrated project management and financial systems see up to a 20% improvement in project profitability and a 15% reduction in billing cycle times. For service firms, this translates into stronger cash flow and better client relationships.
Common challenges include:
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Inaccurate estimates: Poor visibility into resource costs and timelines leads to underpricing and margin erosion.
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Uncontrolled scope creep: Without proper tracking, additional work often goes unbilled.
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Delayed invoicing: Manual processes slow down billing, creating cash flow gaps.
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Limited WIP visibility: Without accurate WIP accounting, revenue recognition becomes guesswork.
How Business Central supports project-based services
Business Central offers integrated features that connect project planning, execution and financial control. Here’s how:
1. Jobs for structured project management
The Jobs module in Business Central allows you to create detailed project plans, including tasks, budgets and timelines. You can allocate resources and track progress against estimates in real time. This structured approach ensures projects stay aligned with financial targets from day one.
2. Resource management for accurate costing
Assigning resources to jobs is simple in Business Central. You can define resource costs, availability and capacity, ensuring accurate budgeting and scheduling. This prevents over-allocation and helps maintain profitability by aligning resource usage with project budgets.
3. Timesheets for real-time labour tracking
Timesheets enable employees to record hours against specific jobs and tasks. This data flows directly into project costing and billing, reducing errors and improving transparency. Real-time tracking helps identify overruns early, allowing corrective action before margins suffer.
4. WIP accounting for revenue recognition
Work-in-progress accounting in Business Central ensures revenue is recognised accurately throughout the project lifecycle. Whether you use percentage-of-completion or completed-contract methods, WIP reporting provides clarity on earned revenue and outstanding costs, supporting compliance and financial accuracy.
Practical steps to keep projects on budget and cash-positive
To maximise the benefits of Business Central for project-based services, follow these steps:
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Start with accurate estimates: Use historical data and resource cost structures to build realistic budgets. Business Central’s job templates can speed up this process.
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Monitor progress continuously: Track actuals against budgets using job reports and dashboards. Early visibility prevents surprises.
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Automate timesheet approvals: Streamline labour tracking and reduce delays in billing by automating timesheet workflows.
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Invoice promptly: Use Business Central’s integrated billing to generate invoices as milestones are reached or tasks completed. Faster invoicing means better cash flow.
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Review WIP regularly: Ensure revenue recognition aligns with project progress. Regular WIP reviews help maintain financial accuracy and compliance.
The payoff: profitability and predictability
By leveraging jobs, resources, timesheets and WIP accounting, project-based businesses can achieve:
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Improved margin control: Accurate tracking of costs and progress prevents overruns.
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Faster billing cycles: Automated invoicing reduces delays and strengthens cash flow.
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Better resource utilisation: Real-time visibility ensures optimal allocation and avoids bottlenecks.
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Compliance and transparency: WIP accounting and audit trails support accurate reporting and client trust.
As Microsoft notes, “Dynamics 365 Business Central enables organisations to manage projects with precision, connecting operational and financial data for better outcomes.” For project-based service firms, this means turning complexity into clarity and profitability.
Ready to take control of your project margins?
If you’re still relying on spreadsheets or disconnected tools, now is the time to explore Business Central. Start with jobs and resource management, then add timesheets and WIP for complete financial control.