The project budget is simply the total sum of money that has been allocated for the specific purpose of a project at a given period of time. The importance of a project budget is therefore to control the project costs within the approved budget at the same time deliver the expected goal of the project. The project budget template is normally based on the scope of the project, the project schedule, the effort estimate and other cost estimates which is required to produce a project cost estimate which shows the cumulative costs over the life of a project. This will be necessary in order to track the actual project cost and compare them to the preliminary estimate as the project progresses.
There are many formats available for a project budget. However, it is important to understand the basics. A typical project budget template is expected to contain component of expected revenue for the project, the personnel and the entire project expenses. It is not expected to be complex in nature but a clear capture of the total expenditure of the project life cycle. For example, the project budget template is expected to help project managers track expenditure over time and react to situations where resources are not well spent and help purse opportunities for cost savings in the project budget.
It does not actually matter if you are organizing a project for work or doing your own personal project, there are chances that you must create a project budget for it. This can help you keep the cost within range and avoid unnecessary spending. However, while creating a project budget seems quite easy, it is important to ensure that all components of a project budget are well captured. The following steps show how to create a project budget template.
Step1
The first thing to do here is to do the basic ground work. You have to know how much you have to spend, how much is available for the project, determine what expenses are mandatory or the most important for the project, identify the key element of your project budget and gather some estimates for the project.
Step2
The project budget template can be created using Excel or MS project depending on your area of proficiency. When using an MS project to create a project budget, add the project name and the project deliverables.
Step3
For each of the deliverable, you can add the key task needed for the deliverables.
Step4
Go to resource sheet and add the resources for the task. In small projects where the resource cost is captured in hours, you can add the hourly rate for each resource.
Step5
At this point, it is expected that you add the cost column. The cost column is expected to display the base cost for the project but it excludes contingency.
Step6
Add the cost for each of the deliverables. You can right click on the column header and select custom fields. You can also add the contingency formula which the cost multiplied by 1.10.
Step7
You can now preview the project budget which shows the total project cost, cost of each deliverable and contingency cost.
Step8
Save your template. That is your project budget
1
Creating a project budget from scratch might be a little difficult for some people. However, one quick option of doing this is to download a project budget template over the internet. In doing so, it is important to ensure that the basic format of a standard project budget is followed. Also ensure that the downloaded template suit your specific situation otherwise modify it to suit your situation.
2
It is important to create a project budget in such a way that it is possible to change budget estimates. This is the reason why it is also important to mange a project budget continually as the nature of doing business, unexpected surprises and scope creep can easily change and affect the project budget.
3
Creating a project budget must require you to know your core cost. This can include travel, software, equipment etc. It is advisable to compare the core cost to the total budget. Doing this will help you know if you are on track or out of track.
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