The importance of project budgeting

Project budgetingJust because a project is completed on-time and reaches the pre-determined goals, doesn’t mean it was successful. If you just asked yourself, “what are they talking about?”, let us explain. There is one other element that is missing from those parameters. The budget. 

If your project is on-time, reaches its goals AND stays within its budgetary requirements, then it can be deemed a success. Therefore, being able to properly budget for your project is more important than ever.

So, where do you start? Below are a few tips for making sure that your budget is on par with your project.

Collaborate

Just because you are the manager of a project and the budget is your responsibility, doesn’t mean you have to go at it alone. Talking to your team members (specifically ones that will be working on the project) about their potential tasks and the estimated time it takes them to complete each one is a great start to building your budget. This is also a great time to see where efficiencies can be gained, and lessons learned from other projects.

Identify core costs

With every project, there are a few costs that are essential to the project and shouldn’t be cut or eliminated. Examples of essential costs are staff, equipment, travel, etc. Identifying these costs early on will help you get a sense of whether or not the budget number you’ve been given is even viable for the project. And don’t forget, it’s not just the hourly rate of your staff…it’s their loaded cost which includes an allocation for benefits. 

Expect changes

In almost every case, there will be changes to your initial budget, for any project. Some of the more common reasons for changes to the budget are scope creep (we’ll talk more about that later), surprises and simply the nature of doing business. Since it’s most likely going to happen, why not get ahead of it and prepare for changes? This means continually updating your budget to include real-time costs, so you always know exactly where it stands and how much wiggle room you have left.

Avoid scope creep

Scope creep is unplanned work that usually leads to excess costs, essentially eliminating your margin. To avoid scope creep, create new project budgets for any work that is outside of the initial scope of work that has been agreed upon for the project. Make sure that the new project budgets have been crafted so that the additional funding will cover the new costs, not dissimilar to creating the initial budget.

Utilize software

So, you have all the details worked into the budget, now how do you make sure you get your project completed on time and within budget. One of the best ways is to use project management software. Using the right tool will help you stay on top of your project at all times, leading to a successful outcome.

Some of the more popular tools are asana, smartsheet and excel. Do your due diligence and research which tool best fits your needs.

For more resources or help on project budgeting, reach out to rhite@chargegf.com or contact us!

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