Project accounting is a distinguished form of accounting done on a project-by-project basis. It aims to prevent projects from budget overruns and get maximum returns by adequately analyzing, tracking, and reporting project finances.
As a general rule, the purpose of project accounting is to meet the needs of project delivery, paying special attention to all financial components of a project such as project budgets, cost estimates, expenses, billable and non-billable elements, and everything that falls within the initiation and closure phases.
This includes the practice of generating financial reports to follow up on the financial progress of projects. Upper managers use them for better visibility across projects to see if they are delivering value to an organization.