Project managers in the AEC world are masters of many things—juggling schedules, managing subs, responding to RFIs, and navigating client requests like pros. But there’s one critical skill that too often gets left off the toolbox: understanding project finance.
Let’s be real: most PMs weren’t taught how project dollars flow—they were handed a budget and told to “stay within it.” No wonder there’s a gap. But that gap has consequences: blown budgets, missed margins, and frustrated clients.
And here’s the truth bomb: You don’t need to be an accountant to grasp project finance—but you do need to know enough to lead with financial confidence.
Whether you’re managing a design contract or overseeing boots-on-the-ground construction, here’s how you can upskill your project managers and turn them into true financial stewards.
Start with the Why
Before you start throwing spreadsheets at your PMs, explain why financial fluency matters. Show them how understanding project finance:
- Improves profitability
- Boosts client trust
- Strengthens career growth
- Helps them manage risk like a boss
Also clarify their role: they’re not expected to close the books—but they are expected to:
- Track budget vs. actuals
- Prevent scope creep
- Flag financial risks early
Hmmm, I think I understand this all to well.
Once that’s clear, it’s time to dig in.
✅ 5 Actions to Build Financial Fluency in Your PMs
- Teach the Financial Lifecycle of a Project
Too many PMs think financial management starts after the kickoff meeting. Wrong. It starts during the proposal and doesn’t end until final billing. And oh by the way, were they involved in the pursuit or did they read the proposal?
Help them understand the entire financial arc:
- Estimating and pricing
- Fee negotiation
- Setting budget targets
- Invoicing and collections
- Budget tracking and adjusting
- Closeout and final wrap-up
Encourage critical questions like:
Are we pricing risk appropriately? What happens if billing slips by 30 days?
Understanding the full journey helps PMs make smarter decisions from the start—and that leads to healthier margins.
- Give Them Real-World Practice
Knowledge without application is just trivia. Let them practice:
- Build a mock estimate from a real project
- Analyze a sample budget variance report
- Role-play “what would you do” scenarios
This kind of hands-on learning builds confidence, competence, and yes—some healthy financial instincts.
- Share Financial Benchmarks
PMs need a baseline. Share key performance indicators like:
- Target profit margins
- Typical overrun thresholds
- Utilization and billing rates
- Collection timelines
Benchmarks give PMs the context they need to spot problems early—and course-correct fast.
- Equip Them with the Right Tools (and Training)
Even the fanciest project tracking software is worthless if your PMs don’t know how to use it. Teach them how to:
- Pull the right reports
- Visualize financial health
- Spot red flags before they explode
Make sure your tools are simple, intuitive, and trained on. The goal is empowerment, not overwhelm. I know easier said than done.
- Reinforce with Microlearning or Coaching
Don’t make financial training a one-and-done deal. Reinforce regularly:
- Short videos or mini-case studies
- Lunch-and-learns (or SLC3 programs, shameless plug)
- Pairing with finance-savvy mentors
The more they hear it, the more it sticks—and the more likely they are to apply it when the heat is on. There just isn’t enough focus on training!
Recognize the Wins
When a PM delivers a profitable, well-managed project, celebrate it. Recognize them for their financial leadership. That not only boosts morale—it reinforces a culture where financial accountability is expected, not optional.
Bottom line? If we want to see better outcomes on our projects, we have to build better financial understanding in the field and in the office. That starts with education, reinforcement, and a culture that supports financial ownership—not just delegation.
Author: Kelly Jackson, Executive Director
SLC3
