Creating and Maintaining Project budgets

Project Budgets

A project is deemed successful based on many criteria, in particular cost, scope and time, staying within budget is paramount. There are six steps which can help create the budget and establish a dependable system to track project expenses. All projects cost money, being able to manage and track expenses is what keeps the project within a budget. Stakeholders are not likely to consider the project a success if it costs them too much.

To avoid expenses from getting away, there must be a system in place to monitor and track it. That’s the only way to control expenses and in so doing stay on budget. Have a system in place to deal with project expenses and have the capacity to track them. This can be via a robust project management software with dynamic functionality or something more static like an Excel spreadsheet.

Regardless of which mechanism is chosen, data must be collected and identify who is spending what and when. This is the bare minimum and a good place to start. Without a system in place there’s no way to know where money is going.

The next logical step is to have a system that is online. Being able to gain access to tracking system anywhere and at any time is more than just a luxury. It has become an essential part of any project management plan. Team members may not be in the office every day, hence an online tool provides access to the system.

A system is important, but it’s useless until items have been identified in the budget. Understanding where the costs are going. To create a budget, estimate the cost of all the tasks that make up the project, including all the resources needed to execute them.

For example, money on resources will be spent, such as equipment and the team; their might be real-estate costs, legal and travel expenses. All these items must be identified and listed in order for expenses to be tracked.

It’s all part and parcel to creating a budget, identify fixed and variable costs and expenses figured out before tracking them. The budget will be the umbrella under which all the project expenses will be covered.

Once the budget is created, it must be approved. This will allow parameters for expenses and help tracking and determining the permissible spend and when those costs are going beyond what has been earmarked for the project.

A system, budget and everything related to managing the project costs are all for nil if there is not a person in charge of overseeing this process. Assign someone from the team who is tasked with operating the system devised to track expenses. This person will become invaluable. They’ll be on the front lines of the actual budget and can raise concerns when costs are exceeding what has been approved for the budget expenses.

To streamline this process and make it more effective, use an online tool. In this respect online project management software has an advantage over Excel, in that it’s constantly updated and reflects actual spending on expenses. Therefore, if a spike in spending is noticed, not only has it been identified quickly but can be addressed before overspending occurs.

The six steps mentioned are critical to ensure there is a handle to a budget, and avoid expense overrun. It doesn’t have to be hard, but it should be maintained, to avoid headaches during the delivery of the project. Use templates if they are available and pay attention to details.

If you have tips and tricks on maintaining a project budget, we would like to hear from you. All the very best on your project management journey.

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