Now that you know about Scheduling and how to add a Task in the Project Schedule, let’s talk about another critical component of Project Management, Project Budgeting.
Budgeting is the fuel of the project (aka, the oxygen to the heart). If you don’t have the funds, you’re not going to be able to complete the project successfully. That’s why it’s important to plan your project budget around the schedule you have already built.
A project budget is the overall total cost needed to complete a project over a defined schedule. So, you have to ensure that you’ve covered all the needed costs before the project starts - it is recommended to keep going back to the schedule to ensure you have every item covered.
When building your cost within the planning stage, you are preparing your projects baseline costs, which is what an organisation will use to measure, monitor, and control the overall performance of the project during execution.
It is recommended that you itemize and align your project costs with your business financial reporting, which could be as simple as “CAPEX”, “OPEX” and “Contingency”. Use the size and complexity of your project as the driver for the way you structure your budgets. Our recommendation is to budget by key phases of delivery (eg, design, build, test, deploy) and group into Vendor, CAPEX and OPEX groups.
The final element to be aware of is ‘Contingency’, as the world is full of surprises and so will your project, which is why it is recommended to add some contingency (eg, an additional 10% to your expected costs) to your project to help manage those situations.
As you can see, there is a large element of risk when it comes to baselining the budgets and costs for your project, so, use this to start populating your initial project risk profile as well.
Now, how can proper project budgeting benefit you?
- Control Costs: Just like the scoreboard at a soccer game, the baseline budget helps you review if you are on-track to win or off-track.
- Early Warning Signs: While re-forecasting and tracking actual costs during the delivery of your project, you will be able to understand if you are burning more money than expected (eg, overspend) vs less than planned (eg, under delivery).
- Change Control: With appropriate structing of your budgets, you will be able to identify which phases of your project delivery caused overspending. This information is paramount to include in the event of you requiring more money (and submitting a change requests).
- Scope Control: When planning a project, budgeting for only the necessary costs to deliver the expected scope is vital, as when you are deep in execution, it can easy to accept variations and changes because them like a valid idea, not because they are necessary for project success.
Focus HQ allows you to conveniently add/update/ view your budget cost items while in the planning stage of a project. After your project progresses into execution, the application then portrays your financials in a Cost Summary and cost performance chart to depict your Planned –vs- Forecast –vs- Actual values for your Overall Total Budget, Total Expenditure to Date, Contingency (if needed), etc.
All of your budget items can be tracked month on month to provide real-time visibility across the entire project at any time throughout your delivery.
You can check the video below on how to go about in the Budget module.
Now, if you need to input a lot of costs items and you don’t have the time for it, you can add all of them at once via bulk upload. It’ll save you enough time and effort, and you can view all of them in one go. You can do so by importing a CSV file containing these budget items.
To know more about Importing a Budget CSV file, you can check this video:
Please also visit the Focus HQ Support Portal for more details:
Feel free to start creating a Budget item in Focus HQ. Start by navigating to the Budget module, and follow the video instructions on how to add a Budget item. Then, you can follow the video instructions on how to import budget items using a CSV file.
If you have any other questions, you can reach out to us via the Focus HQ Help or send us an email to support@focushq.com. We’ll be happy to guide you in navigating through these and provide other valuable support links when needed.