A project budget is a tool used by project managers to estimate the total cost of a project. A project budget template excel includes a detailed estimate of all costs that are likely to be incurred before the project is completed (including planning, estimating, budgeting).
Every project always requires funding. The funds spent are increasing along with the size of a project.
But you also agree that if the funds can be optimized, why should you spend too much money, right?
Like making another budget business, planning a budget for a project also requires a lot of consideration so that existing funds can be used optimally. Inappropriate budget funds can interfere with the course of the project, such as wasting funds and even buying less than optimal property.
So, I will give some steps that you must do to minimize errors that may occur in preparing and after preparing a budget:
Define your project
Before you estimate your cost, you have to define your project scope, timelines, and deliverables. The interaction between the project scope, schedule, and results will determine the size of the funds needed and make it easier for you to prepare the required budget.
For example, when the project scope is large with a short timeline, you will need more funds to pay a lot of staff, as well as for smaller projects.
Define your sources Project Budget Template Excel
In carrying out a project, you must ensure the availability of the funds needed and the source of these funds. Make sure that the funds are sufficient to run your project.
Define your resources and assign the amount you need.
The next step is to determine the resources needed to implement the project based on the type of project and the available funds in the project budget spreadsheet.
Here is an example of the resources you need:
The cost of resources you have to spend. a lot of staff needed to pursue project targets. Staffing costs also increase along with the quality of staff required. The examples expenses are salary, bonuses, employee incentive, Outsourced Labor, etc.
Equipment can be any property required for your project. You must detail and record it so that your project can run smoothly.
Sales and marketing
This point depends on the type of your project. If your project requires it then you should include this. For example, when launching a new product, an advertising budget becomes a necessity.
When a project is implemented, usually some level of organizational change management is introduced. The wider the change, the greater the training investment.
This depends on the needs of your particular project like, accommodation costs, permits, office rent and etc.
Estimate your budget
Here is some method to estimate your budget
a. Analogous Estimation
This technique is a fairly simple technique. This method is generally less expensive than the others, takes less time but is less accurate. This method requires a person who is able to estimate whether the cost of the latest project will be greater or less.
This technique is done by using the cost of the previous project as a guide for determining the latest project budget template excel. This method can be used if the previous project has similar goals, activities, or targets to the latest project.
b. Parametric Estimation
This method uses historical data and statistical modeling to estimate the costs required for a project. This is much more accurate than analog estimates but requires more initial data to accurately assess costs.
The accuracy of this method depends on the available data and whether the model is scalable or not for different conditions. Parametric estimation is often used in construction by estimating the number of square meters required to arrive at the total cost for the building.
You can use a construction project costing template to help you budget your project.
c. Top-Down Estimation
This is done by reviewing your entire project, identifying the main elements of the work, and estimating them separately from the rest of the project. This estimate is used when the total project known budget (using the actual budget of activities in the similar projects in the past) and the project needs to know the cost of each individual activity.
In this scenario the project determines the number of activities or outputs that a project can produce with budget.
The top-down approach is often used for ball-parking in the early stages of a project when the level of detail available is limited, and it can even be used for validation purposes. Top-down estimates generally require less time and effort than bottom-up estimates.
This estimation has the main benefit of providing an opportunity to use data that is more holistic than previous projects, including minimizing risks associated with costs.
d. Bottom-Up Estimation
This technique requires estimation of individual activities and cost of each input and add them up to get the total project.
In this estimation, there is a breakdown of a large project into several smaller components to make it easier to calculate the cost of each component. Examples are divided by department which is then accumulated to calculate the total cost. This estimate can be more accurate because it involves actors in each component to prepare their budgeting.
e. Create your Budget
After estimating the type of project, source of funds, and resources, the next step is to create the budget in excel budgeting. You must prepare this budget with actual data. you can do a mini-research beforehand on the financing of a project.
As part of building your budget, pay attention to any assumptions that go into the numbers. Also, include a timeline if the budget covers a significant period of time usually more than a month. This allows any recurring costs to be clearly identified in the budget. It also helps you identify the time when certain costs will appear.
To simplify the project budgeting process, a WBS is required. The work breakdown structure (WBS) in project management is a method for completing complex multi-step projects.
It’s a way to divide and conquer large projects to get things done faster and more efficiently.
WBS is used to make large projects easier to manage. Break it down into smaller parts. This allows work to be done simultaneously by different team members. WBS makes better team productivity and easier project management.
a. Get approval from stakeholders
After creating your budgeting, you can review the budget with other project teammates for feedback, to help evaluate budgets, identify missing items and confirm quantity accuracy.
When you feel that your budget is appropriate and realistic, you must request approval from the stakeholders.
b. Managing and control expenses as the project progress
Once your budget is approved, your next responsibility is to monitor the progress of the project. This includes setting up an expense schedule and confirming it.
We recommend using project management software to track costs. You can use excel budgeting and make sure the use of these funds is transparent. You can use a Printable project management budget template to help you manage your budget.
c. Update the budget when there are changes
Realization does not always go according to plan. in project implementation, there can be delays in one step for which your budget must also be updated.
You may also expect to spend more than needed, to deal with changes in the realization of funds
Free Printable Project Budget Template Excel
Like another plan template, you can budget your project using a Printable template spreadsheet.
First, you have to download your project budget template excel here. For monthly budget template you can download it in the article about Project Management Budget here
After that customize and fill all activities and risk sources with your project management.