Six project management tips for keeping to a budget

Budgets essentially rule how project managers (PMs) approach their jobs. From the outset of an effort (when PMs conduct initial costing), budgets will in many ways dictate to project managers what they can and can’t do. Organizations often have limited resources to dedicate to a project, so it’s up to project managers to ensure that high-quality results are delivered on time and on budget.

Project managers have to keep a keen eye on every project variable in context of the budget, and that expends a lot of time and effort. Yet PMs cannot neglect budget monitoring. The key is in finding strategies that streamline budget tracking and other aspects — like workflows and communication — that factor into resource use.

Here are six project management tips for keeping to a budget.

1. Develop metrics

Since budgets are really all about numbers and figures — the hard data — it makes sense that project managers should create metrics by which to track resources. Transparency and insight into budget utilization are important for PMs to maintain. This high level of oversight is an advantage in containing costs and even proactively addressing overruns before they can occur.

Some of the key performance indicators that CIO.com recommended that PMs consider include:

● Cost variance, which uses a pre-established baseline to make projections about whether a project cost is on track to be below or above expectations.
● Actual cost, which is the bottom-line, itemized cost of the work performed to date, a raw total project managers can further extrapolate insight from.
● Planned value, which is the estimated cost of a scheduled project activity on the date of the budget reporting, which is important for forecasting resource use.

2. Document expenses

It’s easy for a seemingly harmless oversight to damage the budget. Simple errors like a missed digit or a misplaced order form can amount to a big budgetary headache for project managers. That’s why PMs have to document cost evidence with vigilance, and impress upon their teams and reports the importance of tracking expenses. This responsibility runs the gamut from preserving receipts for even the most mundane purchases to double checking orders or invoices, lest an extra zero wreak havoc on the budget.

3. Look at available history

Sometimes, the best barometer that PMs can use to set expectations for costs is the history of their past projects. It helps if they have past experience running projects for the organization they’re currently with, but experience in other positions can also be beneficial. Previous experiences with labor staffing or materials procurement is an advantage PMs can use to help inform their budget decision-making. PMs can leverage their accumulated knowledge to help nip overrunning costs in the bud and set realistic expectations. Using past experience to set the right budget parameters in the first place helps mitigate the risk of additional expenses being incurred.

4. Highlight budget wins

It’s widely agreed upon that employee recognition helps inspire already-achieving employees to continue putting in the extra effort, and motivates others to do the same to earn praise. PMs can employ this tactic by focusing on budget wins. PMs don’t need to create an entirely bespoke event focused solely on budget wins; simply weaving these highlights into existing meetings or a quick team-wide email to praise a particular employee or group that delivered on quality and budget expectations nets PMs the desired impact.

Calculator and piggy bank for accounting.

5. Have thorough communication

In some cases, the only thing keeping a project on budget is communication. Without an open dialogue on expectations and how costs fit in, there’s little control PMs can assert over the budget. Accountability is a quality that PMs need to stress to all teams and reports. Without a forum for open communication on what’s causing budget problems or where there’s a potential surplus of resources, PMs lack the agility and ability to manage the project in ways that are efficient for the budget.

6. Have a plan for if/when things go wrong

In reality, a project manager can take every reasonable step to progress their project and protect their budget, and some unexpected event or uncontained cost will still find a way to ruin the best-laid plans. Knowing that this danger is always around the corner, PMs should operate with a plan for disaster. Even if it never comes into play, preparing for the worst is quite useful when the worst does indeed strike. A contingency plan is among the many items project managers need before a project gets underway. Another thing to remember is that these plans are fluid, and should be adjusted and looked at throughout the course of a project’s life cycle.

Build budgeting skills at Brandeis University

Budgets play a central role in any project, and PMs need to have a robust set of skills to expertly and efficiently manage costs. From hard skills like accounting techniques to soft skills like team motivation, there’s a lot that goes into running a project to expectations. Delivering results on time and on budget takes a concerted effort from project managers. Those who are looking to build their budget-mastery skills can consider the online Master of Science in Project and Program Management degree that Brandeis University offers.

Sources:

https://www.cio.com/article/2406862/project-management/project-management-project-management-4-ways-to-manage-your-budget.html

http://blog.mavenlink.com/a-project-manager-s-top-ten-tips-for-keeping-a-project-on-time-and-on-budget

Recommended reading:

A Look at Project Organization and Scheduling

Tips for Managing Contracted Government Projects

Tips for Stakeholder Management

call to action
Post a Comment or Question

Leave a Reply


− five = 0

  • Accredited by New England
    Association of Schools and
    Colleges

  • Member of the Association
    of American Universities

  • Ranked No. 35 in
    U.S. News & World Report

  • Ranked No. 1 in
    Online Project Management
    Grad Program
    SR Education Group.