How to Evaluate Progress against Budget

A “project” by definition will forever have a limited time frame and a fixed budget. The “budget” is the amount of money that the Project Sponsor is prepared to spend to attain the project aims. So here are several tips and tips on specifying your budget and measuring progress against it.
 
Don’t fix it in solid
Your 1st task as a Project Manager is to ask your Sponsor “So how long have I got and what’s the budget?”. Your next job is frequently to ask for more time and money to advance your probabilities in achieving.
 
You can perform this by writing a Business Case, Feasibility Study,  Project Charter to show your Project Sponsor that you will need excess funds than that identified to date, to meet the project targets. When you have agreed on a value that you consider is sufficient, require them to “fix this amount as a budget, but have it available another 10-20% as contingency”. That way, your budget isn’t established in solid. Yes it’s an accepted amount but at least you get contingency.
 
Preparation beforehand
Right at the outset, create a Financial Plan so that you have a detailed prospect of all of the expenses that are working to develop and when they will be received. And if you haven’t through it already, complete a Project Plan so that you determine the price of each task to be fulfilled.
 
In this way, you know for every week in the project the quantity of money that will be depleted. Make certain that the quantities in your Financial Plan and Project Plan align with the budget arrangement. That way, you know that you have a positive opportunity of delivering within budget from the outset.
 
Setting out
From the minute you’ve set the budget, you need to begin recording the actual price of the project. This takes the real cost of your time, your staff, contractors, equipment and materials. If you’re practicing internal staff, then designate a prescribed rate to the hourly price of these resources and ask them to finished a Timesheet so you recognize how many hours they are spending on the project.
 
If you don’t own a financial organization, then apply a spreadsheet to register  the day-to-day price of the project. And if you want to get specific, then also record the prices against the tasks in your project plan. By accurately recording the project prices throughout the whole project, you will be able to ensure you keep on track.
 
Continuing on path
To verify whether you’re on path, manage your real costs vs. your predetermined costs, and identify any differences. If you’re forever under your planned weekly cost, then you’re probably to carry your project under budget. It’s that easy!