How to manage the budget of your project

Managing the budget of a project is one of the main things that a project manager needs to deal with. Not matter whether the project meets the objectives set out in the beginning, and is delivered on time, if it goes wildly over budget, it is not going to be considered a success. And, of course, it is easy for projects to go over budget, especially when changes are made. Keeping that in mind, read on to discover some top tips on how to manage project budget effectively.

1. Project management training – There is only one place to start, and this is with project management training. If you have not taken one of the available project management training courses, you will not be aware of all of the different techniques you can use to manage a budget. Moreover, you will not know the warning signs to look out for in regards to budget creep. Part of managing a budget is understanding when circumstances are on the horizon that could significantly impact cost.

1. Forecast the budget regularly – One of the biggest mistakes project managers make is viewing the budget as a one-time thing. On the contrary, you need to continually forecast the budget to make sure you do not run into any problems. The budget can easily get far out of hand if you do not engage in frequent budget management and re-forecasting. It is far easier to correct a five per cent budget overrun than it is to rectify a 40 per cent budget overrun.
2. Continually forecast the use of resources – Not only do you need to constantly revisit the budget, but also you need to do the same for the use of resources. After all, those working on a project are going to contribute to the cost of it. On a weekly basis, make sure you look at how many people are working on the project, as well as the future resource requirements for the project. This will make sure that you are using the resources you have to full effect while also making certain the correct resources are in place for the remainder of the project. This all works towards keeping the budget of the project on track.
3. Don’t leave the team in the dark – A lot of managers believe it is better to keep budget constraints quiet. This is not the case. Instead, the project budget forecast should be communicated to the team. This will empower them to take ownership of the project. They will be less likely to charge extra hours for time spent when they are unsure regarding what they are working on, and they will watch their project charges with greater care.

To conclude, if you follow the four tips that have been mentioned above, you will have a much better chance of effectively managing the budget of your project. From keeping that team involved to forecasting the budget regularly, these are critical steps that must be undertaken for successful budget management.

The author has written and published articles on a wide range of topics including Small Business Advice, Tax and Accounting, Interior Design, House Renovation and Project Management.