You have to create a project budget template in order to succeed in your project. A project budget allows you to monitor the expenses of your project. You should create it at the early stages of your project. Never go over your budget because this places your entire project at risk.
Table of Contents
- The significance of a project budget template:
- What to include in a project budget?
- How to create a project budget in Excel?
The significance of a project budget template:
Projects include various tasks and the accomplishment of all these will result in the overall completion. You require the necessary resources for the completion of a project such as hiring a team, possible contractors, and any other resources you have to pay for. It is important to include all these in your project budget template.
Moreover, creating a project costing template is quite difficult due to the uncertainties that a project could face. But nowadays, you can download templates or use applications like Excel spreadsheets to make your financial structure. Some of the costs included in the projects are much easier to collect such as;
- Consultant fees
- Raw materials
- Software licenses
Some costs may modify or get carried over from one project to another like;
- General administration
- Telephone charges
- Office equipment
- Office space
- Company insurance
What to include in a project budget?
You should include the following elements in a project budget template;
This section forms the bulk of your project. This is because it contains the items that you must pay for or purchase to get your project moving. All these items are very easy to pinpoint. It is important that you should coordinate with your team then brainstorm all of the items you require.
These costs in your project keep it running. These are the costs of doing business. However, they aren’t included in your projects.
Capital costs are the costs that you experience when you buy items to use in your project. Spending capital refers that you are obtaining assets for your company. These items can be anything you will utilize in your project. Furthermore, in purchasing these things, at the end of the day, you will get something tangible. While upgrading existing assets or fixing something broken to use for your project, capital costs are also included.
These are essential to run your project and team. Operating costs are quite identical to indirect costs. These costs hit your company’s loss and profit accounts so you should account for them differently. On your balance sheet, you can deal with these costs as a different kind of expense.
Project deliverable costs:
These costs refer to the costs involved in creating your project’s deliverables. This includes product breakdown structure or breaking down structure. After that, map out the costs to use in each aspect of work related to the deliverables.
Project management costs:
It includes the costs of running your project. These costs may vary on the basis of who is in charge of project management. You may also like project charter template.
How to create a project budget in Excel?
Let us discuss step-by-step on how to create a project budget in Excel;
Determine the scope of your project:
At first, establish the scope of your project before making an estimate of the costs of it. By creating a Work Breakdown Structure, you can do this effectively. This allows you to gather all of the work involved in delivering your project in a much explained way. In this way, you can easily assess your project’s resource requirements.
Define the resources you require:
The resources you may include to complete your project are the following;
Staff requires the most expensive cost for your project. You may require more team members for your workforce on the basis of the scope. You have to compute the salaries of each team member. Then, add these numbers in your budget.
For a construction project, this expense may come in the form of machines such as an excavator or a pay loader. So, include all the tools you require for the completion of your project.
- Sales and marketing:
Some projects also involve the marketing and sales costs although some don’t include them.
Generally, you should introduce a degree of organizational change management in your project. Such change requires training.
- Miscellaneous Items:
If you want the services of an outside company then includes their fees and this thing comes under miscellaneous items.
Assign estimated amounts:
After identifying your project’s resource needs, you can start assigning estimated amounts. You just have to review your list of resources and make an evaluation for each of them. There are also some resources that require to model out the costs. For staffing, it is important because employee salaries may vary from one person to another here.
Make your budget:
Now, you have your estimate after writing down the resources you require for your project and assigned values to them. You should also add a contingency fund as part of your budget. In the next step, compile the estimates in a spreadsheet. You can also use another tool that your company uses for this purpose.
Furthermore, during coming up with your estimated figures, you should consider any assumptions that you made. If your budget spans a specific time period then you also have to include a timeline. This way, you can clearly determine any recurring costs in your budget. When you have all done with your budget, it’s time to review it with your team members and get feedback.
Before implementing it, get your budget approved:
While presenting your project budget to your stakeholders or other business leaders, you have to well prepare to justify the amounts and items. It is the obligation of project manager to oversee it once your budget gets approved.
In conclusion, a project budget template has contains all of the financial information regarding your project. This document suggested you to monitor your project budget spreadsheet on daily basis to make the most of it.