Mastering Project Budgets: 7 Expert Tips for Accurate Cost Management (Full Transcript)

Speaker 1: Today, we're talking about how to create a project budget, and with that, I want to share seven expert tips. But first of all, let's clarify what the project budget is. It's the total projected cost to complete a project during a specific period of time with a specific result. We want to be sure that we include several components. First of all, we want to include the direct cost directly related to the project, as well as any indirect cost as well. We also want to include fixed and variable cost, any labor and materials, as well as travel. There may be some travel-related expenses we need to include, as well as equipment we may need, and any space, any leases or license costs. There may be some other costs as well, but these are just a few ideas. Why do we want to create a project budget anyway? Because it helps us to track the budgeted versus actual cost. That gives us a variance that lets us know in the end or all along the way how we're doing. So, let's talk about the expert tips. First of all, use historical data if it exists. If you have a similar project, use historical data so you can compare data so you won't have to start from scratch. Also, reference lessons learned. You want to be sure not to repeat those same lessons. You can take that and include it in this project as well. Leverage your experts, and that includes your team members as well, so your team who possibly have done similar projects can provide input, as well as your stakeholders. Then confirm the accuracy. Once you build your project budget, you want to maybe provide input and have people look at it to ensure that data is accurate. Also, baseline. Once you have finalized your project budget, you want to baseline, and that's what you'll use all along the project to gauge the variance. The re-baseline, to me, is one of the keys between a failed and a successful project. If you have changes to the budget and your change control board approves those, then that gives you the ability to re-baseline that budget. Also, you want to update the budget real-time. If there are changes, you want to be sure that that's done on a regular, consistent basis so you're tracking against the right numbers. Also, get things back on track as soon as possible because every little deviation just compounds the problem. If you need a tool that can help you create, manage, and track your budget, then sign up for our software now at ProjectManager.com.