A project without a budget is like a car without fuel. Budget is one of the crucial elements that have to be prioritized initially before starting the project. Managing your personal expenses takes too much monitoring, whereas monitoring the budget of the entire business is a bit too overwhelming. So thankfully many project budget tracking software has pulled down the stress and made work much more easier and fun.
Projects run with many additional different ty[pes of costs which require tracking in order to ensure that everything comes in under budget. Project budget tracking software allows you to keep track of finances all the time. These tools are specifically designed so that you can take charge of your project expenses and monitor the spending till you run down the project completely.
What is Project Budgeting?
Before we jump to the ins and outs of creating the budget for any project, it is important to understand what project budgeting is. A project budget is an estimated cost of completing a project assigned by project managers. Project managers start creating a project budget during the commencement and continue monitoring it till it reaches the finish line. The accuracy of budget forecasts is tough as making sure that your project gets approved and funded whenever needed.
Without a clear window into your expenditure, it is easy for the costs to slip down from the hand. A meticulously planned budget is the holy grail where scaling smoothly and sustainably is critical for organizational survival. The project Budget includes critical thinking about things like:
- How is the overall number derived?
- How will the cost be spread across project milestones?
- How will you tackle project costs?
- How will you monitor cost data- will you use Project Budget tracking software or any other tool?
- How will you handle the phase of the project in which you might be running over or under the budget?
- How will you handle a budget management portfolio? At times organizations run with multiple projects- what will be the framework to manage the budget of those multiple projects?
The project budgeting process is ongoing, something you need to work on continuously, it is not just a one-time cost estimation. Costs fluctuate, circumstances change, and project elements get derailed.
Why is a project budget important?
There are reasons to explain why a project budget needs to be planned:
- Project Budget needs to be planned for securing the funds. The numbers will tell the stakeholders exactly how much money is needed to fund the project and when the money is needed.
- Having a budget estimate helps you to measure the project’s actual cost against the approved budget and to monitor how much cost you’ve burned. It gives a clear understanding of how the project is going or if any changes need to be done.
- A project budget has a direct effect on the company’s financial viability. When calculated feasibility and with resource constraints in mind, a project budget will increase the operating margins and increase the overall success of the project.
How to create a Project Budget?
To have an accurate project budget it is important to align all the items for easy tracking. If you have a straightforward project expense then it gets easier to monitor the spending on the project timely and accurately.
Few easy steps for making a project budget can lead to a successful project.
- Identify Expense
The foremost step in creating a project budget is to identify your expenses. You need to include everything that is required to complete the project. This also includes labor costs, equipment, materials, and many other things. You need to examine your project plan thoroughly and need to examine the expenses from the beginning. It is impressive to list down all the expenses, the more you identify, the less you will be surprised by the unforeseen expenses later in the project.
- Estimate all costs
Now estimates the cost of all the listed items. There are several strategies that you can use to make the estimates. Add all the estimates. This gives you the total planned budget for the project including the cost of every task.
- Add in extra
Well, the cost of each individual task will not be enough to make an accurate estimate. You still want to add extra:
- Management Reserve: Money to use at management’s discretion
- Contingency: Useful to cover unforeseen costs due to poor estimation.
- Risk Response Budget: If you are mature enough to manage the project risk, you might be able to incorporate the risk response budget separately from the main budget.
Why is Project Budget Tracking Software important?
Project management software with Budget tracking allows you to automatically and continuously monitor your budget throughout the project so you are aware of any budget variances and to manage their impact. It will help you oversee the processes, control them in real-time and prevent scope creep from happening. It is crucial to choose the right tools that will meet your organization’s needs and will keep your team productive and engaging. Take a look at the benefits below and decide for yourself:
- Keep an eye on growth: with time tracking software you can track actual and estimated budget costs. The difference in expense will help you to track your growth throughout the project.
- Increased Productivity: Keeping an eye on your project’s budget plays a vital role in your business growth. It helps you to increase production rates to a great extent.
- Project Communication and Coordination: Communication and coordination walk together for the successful completion of any project. Any gap will lead to detrimental results. Project budget software comes with handy features to increase productivity along with coordination within the departments.
- Budget Forecasting: Budget Tracking Software allows you to set personalized billing methods to estimate costs for the future.
- Improve Results: Budget Tracking software accuracy and precise estimates will help you with better estimates and budget forecasting. In a way, Budget tracking software improves the results and increases your profits to great extent.
Best Project Budget Tracking Software
eResource Scheduler offers advanced project budget tracking features to track multiple projects and manage your budget. When you consider that you can track your budget with a real-time dashboard, input recurring expenses, and report on every aspect of the project, it’s clear that eResource Scheduler has what you need to create and manage project expenses. You can easily track the budget of multiple projects and get a clear understanding of gaining profit on which budget and can plan the strategy for your other projects. Complete your next project under budget with free 14 days trial of eResource Scheduler Project Budget tracking Software.