Budget Control Basics
Updated: Oct 25, 2021
Project managers or other executives in charge of project management for a business or company must also prioritize project elements to fall within a predetermined budget. Budget control is often at the top of the priority list for any project. If your project spins wildly out of control and bounces out of budget boundaries, which is not uncommon with outstanding project ideas, it will likely fall into the pitfalls of incredible plans that simply didn’t fit the bill. Successfully deliver a dynamic project plan that stays within the lines with every proposal you organize. These planning strategies will help you control your budget and present a winning plan every time.
Frequently Project your Budget
Keeping your budget up-to-date and relevant is perhaps the most vital strategy you can use to manage your project’s budget. If you fail to make the necessary adjustments and frequent updates to your budget, the project is in imminent danger of falling between the cracks and being lost forever. This step is often more important than most project managers realize. Failing to keep proper track of your project budget will inevitably lead to overspending, pushing it right over the edge. Suddenly, not only has your budget disappeared, but your project lies in a million pieces at the bottom of the cliff. However, if you keep a proper eye on your budget by properly forecasting and projecting necessary adjustments, you will be better able to keep your project on track and avoid its catastrophic demise. Constantly reviewing, sharing, and adjusting the budget will keep it at the forefront and fresh in your mind.
Keep Track of Resource Usage
The manpower placed behind a project is often one of the largest costs of any major undertaking. Consistently monitoring your resource usage will help you maintain budget control and keep your project on track. To most effectively keep track of resource usage, you should review the number of paid individuals actively playing a part in the project on a weekly basis. Analyze those numbers against projected resource needs for the remainder of the project. Taking time to complete this step will not only ensure you are effectively using your resources, but will also allow you to be certain you will have the necessary resources available for the duration of the project. Performing this management task on a regular basis will keep your budget on track and your project running smoothly.
Involve Everyone in Budget Control
Just as everyone must work together as a team to complete the project, the team must also work together to control the budget. Keep your team involved and informed about the process of the project and the projected budget needs. Involving everyone in managing and implementing project costs will let them know they are valuable assets vital to the success of the project. They are more likely to work together and stay on target financially if they feel they are a playing a beneficial part in budget control. Including your team in budget control and keeping them informed of progress empowers them to work more effectively and efficiently.
Anytime you are working on a project, there is the possibility of unplanned work creeping its way into your planned timeline. This shift in focus can throw your project deadline way off track and derail the best-laid plans with its effects on your budget. The primary concern with this unplanned work is that it creeps into your project quietly, steadily increasing billable hours and causing expenses to fly off course. To help avoid this disaster, use a sales dashboard to manage project scope and focus. Use the dashboard to monitor the project carefully and implement change orders for work or items that have not previously been covered and accounted for. These orders will authorize the additional funding necessary to cover unexpected expenditures and keep your project running smoothly with a newly established budget.
The above strategies are of particular importance for small businesses. If you are keeping the books for a small business, keeping expenses in check is of extreme importance. Watching costs is typically a greater concern for smaller businesses with limited resources. Regardless of the size of the business, however, properly forecasting your budget and resources on a regular basis, maintaining focus, and keeping everyone involved will help you keep your costs on target and your project on the track to success.