Managing a project may seem easy, but learning how to manage project budgets takes a special mix of education and experience. A project that falls out of scope can not only put the project in danger, but risks the reputation of you, your team and the company you work for. When it comes time for you to figure how to budget for a project, there are a few things you can do to keep your internal team and client happy, including:
- Create a detailed project plan
- Check in on the budget
- Track the project
- Always be proactive
Of course, most projects do experience bumps in the road, but being well-prepared for a host of possible circumstances can help keep projects on the intended course. From creating a detailed project plan to understanding the top surprises that’ll blow your budget, you can learn how to budget for a project with these tips.
Create a Detailed Project Plan
Every piece of the plan should be laid out in detail. It should then be reviewed and signed off on by all parties involved to ensure there is no confusion later. The budget needs to be carefully in line with the plan, preferably with room for a few alterations. If you’re writing your first project plan, get help from an experienced team member or mentor. Whether you seek help online or from a colleague, you don’t have to do this alone.
Check in on the Budget
Regularly checking in on the project status and ensuring it matches up with the budget is an important piece of maintenance that project managers should be practicing. Systematically receiving updates during different phases of the project, from project initiation to closure, to see if spending is on trend can help identify any problems quickly. If a cost increase is on the horizon it is important that it be addressed and rectified as soon as possible.
Track the Project
Part of the project manager’s job (and learning how to manage project budgets) is to get into the habit of regularly checking in on all aspects of the project. This will give them an opportunity to not only keep a watchful eye on the budget, but check in on tasks and resources and reallocate as necessary.
Always Be Proactive
Once you’ve learned how to manage project budgets, never sit back and expect the project to run its course as planned without interference. If you wait until someone alerts you to a problem, or suddenly it is the end of the project and you are ready to present deliverables only to find you have majorly exceeded the budget, you will be left with a very unhappy client. If you are able to acknowledge the problem areas that are siphoning more funds than planned, you will be in a more desirable position to keep the project budget at a manageable level.
Project Management Software Can Help You Track Budgets
With robust project management software, you can track all expenses that a project incurs: employee, department, task and work item, allowing you to better monitor expenses to ensure your project stays on budget. You can set hourly rates across the enterprise on a high, general level or for a specific project. You can also view projects and actual staff hours in real time, and analyze burn rate and billing status for each project, allowing you to note right away when a project is veering off course and heading towards breaking the budget.
Staying on budget requires active involvement from start to finish. Begin with a detailed project plan that has been reviewed by all participants. Regularly check in on how the budget is fairing and track the project closely. Project managers should be proactive in maintaining expenses incurred during the course of the project and should keep all team members informed of status by utilizing a transparent SaaS project management system.