Budgeting in Project Management
By Cora Systems
Organizations are facing challenges regarding their budgeting in project management. Pressure to follow through with only the projects that are going to be successfully and carry less risk is mounting. As a project manager you need to keep budgeting queries and be aware of benefits at all times throughout the project. You will need to answer plenty of questions regarding budget such as; How much is this project going to cost us? Have all budgetary items been accounted for including man hours, equipment, outside resources etc. In brief, can this project be delivered successfully within an assigned budget?
How your budget is distributed can determine the success of a project. A project that is completed within the predetermined schedule and reaches the goals set should not in theory be considered a success unless the project meets its budgetary requirements. Therefore project managers would need a high level insight into their financials to ensure the project won’t overrun the initial financial plan.
To help you stay within budget I have gathered together some quick tips:
- Review the budget: By not reviewing your budget forecast frequently you can carry unnecessary risk into the project. As a project manager you should take the steps to ensure the budget forecast is consistently review by the accounts department to ensure that the project stays within the budget set. By reviewing the budget throughout the project any issues will be highlighted and the necessary amendments to the budget can be made.
Management of the project scope: Unplanned resource hours can have a huge impact on your projects pre-designed budget. As a project manager, you should have a process in place to deal with these changes. A method of control could be found through a change order system.
Communication channels: I firmly believe that clear channels of communication are a must when dealing with projects especially around budgeting. As a project manager it is important that you communicate to the other project team members any details regarding the projects spend and budgets. By working with a project team that is well informed will help ensure that no risks come from communication problems.
Project resources: The project resources are ultimately where most of your project budget goes. As a project manger it is essential that you pay close attention to the resources and skills assigned to a project to ensure that they are being fully utilized and that the right balance is there.
Project risks and issues: Possible risks and existing issues have a way of making their way into projects and causing problems. Therefore it is of upmost importance to keep a tight eye on your project risks and reduce the level at which they can affect your projects budget. It is unrealistic to stay clear of risks and issues however you can have a plan of action for when and if they do arise.
Budgeting and financial control of your projects must be actively managed; it is an important part of the project management process and should be reviewed by the project manager, financial team, stakeholders and key project team members regularly. By keeping a close eye on your project budgets you will be assured that they are kept within the forecast set from the beginning.
Established in 1999, with over 12 years of experience in Project Management Software, Cora Systems have developed a highly functional, web-based system. Our skills and knowledge have enabled us to become a world leader in Project, Portfolio and Performance Management Software. We value our extensive client base and provide a comprehensive range of services to ensure our customers gains the full value and benefits from using ProjectVision. www.corasystems.com