You might encounter issues in your projects when you forget to consider some important elements in your budget. As such, it becomes very difficult to monitor expenses resulting in your project spending more than that you set aside for it. To succeed in your project, you have to create a project budget template.
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Project Budget Templates
The importance of a project budget template
Projects consist of several tasks and the completion of all these will result in the overall completion. For this, you need the necessary resources like hiring a team, possible contractors, and any other items that you need to pay for. You will include all of these in your project budget template.
You create your project management budget template at the early stages of your project. You must make an estimate of the costs while trying to be as accurate as possible to prepare the allocated funds. Make sure that you don’t go over your budget this places your whole project at risk.
Because of the uncertainties that a project could face, it is quite difficult to create a project costing template. Fortunately today, you can download templates or use applications like Excel spreadsheets to gain firmer ground to create your financial structure. Some of the costs involved in projects are much easier to gather like:
- Consultant fees
- Raw materials
- Software licenses
There are also some costs that might change or get carried over from one project to another like:
- General administration
- Telephone charges
- Office equipment
- Office space
- Company insurance
Project Budget Trackers
What is included in a project budget?
You can use a project budget spreadsheet as a tool in making estimates of the total cost of your project. A good project budget template must include a comprehensive estimate of all the costs that you will incur throughout your project.
The size of your budget depends on how big your project is. The really big and complex ones may have budgets that are a few pages long since these include large numbers of costs like material procurement costs, operating costs, and labor costs.
Because of the processes involved, the project management budget template becomes an essential document as you’re expected to update it over the course of your project. When making this document, include the following elements:
- Direct Costs
This category forms the bulk of your budget because it includes the things you must pay for or purchase to get your project moving. These are very easy to pinpoint. You need to coordinate with your team then brainstorm all of the things you need.
- Indirect Costs
These are the costs involved in keeping your project running. They are the costs of doing business and normally aren’t included in your budget.
- Capital Costs
These are the costs you incur when you purchase things to use in your project. Spending capital means you’re acquiring assets for your company. This can be anything you will use in your project. In buying these things, you will get something tangible at the end of the day. Capital costs are also involved when you upgrade existing assets or fix something broken to use for your project.
- Operating Costs
These are the costs that have something to do with running your project and the team – they’re quite similar to indirect costs. But you account for them differently as they hit your company’s loss and profit accounts. You can manage these costs as a different kind of expense on your balance sheet.
- Project Deliverable Costs
These are the costs involved in creating your project’s deliverables. This involves product breakdown structure or breaking down structure then mapping the costs out to use in each aspect of work relevant to the deliverables.
- Project Management Costs
These are the costs of running your project. These costs vary depending on who is in charge of project management.
Project Costing Templates
How do I create a project budget in Excel?
Generally, a project budget template contains all of the financial information about your project. It provides you with an estimation of all your relevant expenses. It’s always recommended for you to regularly monitor your project budget spreadsheet to make the most of it.
The creation of a project management budget template is an integral aspect of the planning stage of your project management process. Here are the steps to follow in creating your own project budget template:
- Identify the scope of your project
Before making an estimate of the costs of your project, you should first establish its scope. The best way to do this is to create a Work Breakdown Structure. With this, you can capture all of the work involved in delivering your project at a very detailed level. From there, it becomes much easier to assess your project’s resource requirements.
- Define the resources you need
This step entails determining the resources that you need to complete your project. These may include:
This is usually the most expensive cost for your project. Depending on the scope, you may need more team members for your workforce. You need to compute the salaries of each team member and include these numbers in your budget.
This expense can come in the form of machines like an excavator or a payloader for a construction project. It can also come in the form of addition of tools like software for project management. Include all of these in your template too.
Sales and Marketing
The nature of your project may involve marketing and sales costs although some don’t include these. If your project does, make sure to factor in the appropriate expenses.
In most projects, you will usually introduce a degree of organizational change management. Such change requires training and the more expensive the change, the greater your training investment will be.
There are other project considerations dependent on the specific needs of your project. For instance, if you need to travel for your project, you must include travel expenses as part of your budget. If you need the services of an outside company, you must include their fees. Things like these are part of your miscellaneous items.
- Assign estimated amounts
Now that you have identified your project’s resource needs, you can start to assign estimated amounts. Review your list of resources and start coming up with an evaluation for each of them.
Sometimes, it can be a challenge to determine exact dollar amounts. This is where research plays an important role. Research historical budgets for similar projects in the past. You can research online or talk with the members of your team who have some experience or insight into this aspect.
There may be some resources where you need to model out the costs. This is especially true for staffing, where employee salaries may vary from one person to another. As a result, it becomes more effective to create a model in a spreadsheet to estimate your staffing costs across your project’s timeframe using average industry or salary norms for the staff positions.
- Create your budget
After listing down the resources you need for your project and assigned values to them, you now have your estimate. Always remember to include a contingency fund as part of your budget.
The next step is to compile the estimates in a spreadsheet or whatever tool your company uses for this purpose. If your company uses spreadsheets, it will be a good idea to group the related items together first.
While in the process of building your project budget, you have to consider any assumptions that you made while coming up with your estimated figures. This is vital because as soon as your project starts, some of your assumptions might hold true while others won’t. This could lead to actual project spending or diverging from your budget. By noting these assumptions, you will have a better understanding of why your budget didn’t reflect reality.
Additionally, you also have to include a timeline if your budget spans a specific time period – usually over one month. This allows you to clearly identify any recurring costs in your budget. It will also help if you can identify the timings when certain costs arise.
When you have finally completed your budget, then the next thing to do is to review this with your team members and get feedback. It becomes a lot easier and faster to identify missing items or confirm the accuracy of your estimated amounts if there are several sets of eyes reviewing your document. This will avoid any budget mistakes before you submit the template for approval.
- Have your budget approved before implementing it
Make sure you’re well prepared to justify the amounts and items when you present your project budget to your stakeholders or other business leaders. It is during this time that you need to highlight key assumptions and other justifications like your staffing model.
After your budget gets approved, it will be the responsibility of the project manager to oversee it. It’s recommended that your project manager uses project management software to keep track of costs. That way, when members of the team start to get delayed on deliverables or other delays arise, you will know how these affect your budget.