- When I think about budget management,
I think about driving with my GPS.
I enter where I want to go
and pay attention to it when there's an upcoming turn
or if I hear the ominous "Recalculating,"
meaning I've taken the wrong road.
When you've built and confirmed your project budget,
it's like entering your destination in the GPS.
As the project progresses,
you may take turns you planned for
and turns you didn't plan on.
Those unexpected turns are when you spend
more or less money than you intended
or at a different time than you planned.
The metrics you use to manage your budget
should alert you to those turns
and recalculations you need to make.
You might vary from your planned budget, but that's okay.
Understand why.
Here are some tips for understanding variances.
First, you need to collect the cost of your project team.
To know if you're on track,
you need to plan for the people
you'll have working on your project.
As mentioned, it's the number of hours
or percentage of time they intend to work on your project.
As the project progresses,
you track the actual time they work on your project.
It would help if you understood any variances
between your plan and what actually occurred,
to ensure you're on track.
Oh, by the way,
be sure you count yourself as a project manager,
unless you plan on working for free.
Second, you'll want to track your completed tasks
against those you plan to finish at any time.
Do this every week.
While this is an excellent way to manage your schedule,
it's also important for budget management.
If you find yourself behind schedule,
you may need to increase your labor costs
to make up for that.
Understanding that in advance
is an integral part of budget management.
Third, when you purchase equipment or supplies,
it's important to note the timing of your payments.
If a purchase varies from when you plan to spend that money,
you can appear to be over or underbudget.
Being able to explain that to stakeholders is critical.
I had a situation
where I purposefully bought something earlier than planned,
but I did so because it was less expensive.
For a short time,
the project appeared to be way overbudget,
but I'd saved my company money.
So track those purchases.
Follow these tips,
and you'll have a minimal amount
of "Recalculating" moments with your project budget.