Generally, you can break down every project into smaller tasks that eventually lead to its completion. For any project, there is a need for resources like hiring workers to form a project team, contracting vendors, buying materials and few other things. All of this involves money so you need to itemize the processes and lay down an estimated budget. To make sure that you have accounted for all expenses, you need a project budget template.
Project Budget Templates
What is a project budget template?
As a project manager, you use the project budget to create an estimate of the total costs of a project. This project management budget template usually includes a comprehensive estimate of all the costs that you may incur before the project’s completion. The size of a project budget depends upon the size of the project.
In itself, the project budget is a “dynamic document” as you continuously update it throughout your project. At the onset, the document allows you to determine how much your project will cost. Throughout your project, you will constantly monitor whether or not you’re sticking with the budget.
Project Management Budget Templates
What is included in a project budget?
A project budget template is a document that outlines what you estimate you will spend on a certain project. In general, it covers all of the expenses you need for the project’s completion. There are different ways to categorize the project costs when making a project budget tracker:
- Direct Costs
These make up the major portion of the budget and involve the things that you will pay for or purchase the project to move forward. These are what we refer to as “project costs” and you can easily identify them. It’s recommended to consult with your team to brainstorm all of the items that you must procure for the project.
- Indirect Costs
These are the costs involved in keeping your project’s team in operation. They are the costs associated with doing business and as a norm, aren’t included in your budget. These are the costs of having resources and if these involve employed personnel, you must account for these.
- Capital Costs
These are the costs incurred when you purchase materials. When you spend capital, you will give assets to your project. Capital costs are investments for your project that you benefit from.
- Operating Costs
These are mainly used in running the team and the project – a bit similar to the indirect costs.
- Project Delivery Costs
These are the costs involved in the creation of project deliverables. You can determine the costs involved in each task that relates to one of the deliverables from your product breakdown structure or work breakdown structure.
- Project Management Costs
These are the costs of running your project and they usually include the following:
All of the people involved and the admin-related things like setting up an office for project management if needed.
Any temporary salaries or staff needed for your project.
New licenses or permits needed to move forward with your project.
What to consider?
When creating a project budget template, there are some things that you must consider first. Here are the most important ones:
- Cost Estimates
Budgets in most project management generally consist of different kinds of expenses as we have enumerated above. You need to concentrate on making the best effort to accurately gather the resource requirements for your project.
As much as possible, try to realistically think of cost estimates without being too modest with your figures. This ensures that you won’t go over the budget.
- Budget Contingency
Perhaps the most difficult challenge when creating a project cost template is the unknown. Even when you come up with the most detailed estimates of resources and costs, there will always be some unexpected alterations or delays in your project that might require you to revise the document.
If you can complete your project without having to use the contingency reserve, then you might even have extra money left over for smaller projects.
- Budget Monitoring
Just as you would monitor project activities, there is also a need to monitor and keep track of the expenses you incurred throughout your project. This ensures that your project will stay within the limits you have set.
Project Budget Trackers
How do you create a project budget?
To create your project budget template, you can use a project budgeting method or just stick with a simple planning routine. Here are some steps to guide you as you put your finances together to create a summary for your project budget:
- Break your project down into milestones and tasks
If you follow a task list for your project, you will have a clearer understanding of what you need to do which, in turn, helps you with the management of project costs.
If you already have prepared a task list, you can begin your project immediately. If you don’t have one yet, then you need to start creating an outline of everything that you and your team need to accomplish for the project’s completion.
- Estimate each of the items in your task list
As you will notice in any project budget example, the next thing to do is to give each item you have written in the list a realistic estimation. At this point, you should already have identified all of the materials and resources you need to perform well. Include these in your estimate so that you can calculate the costs.
- Add the estimates
Many consider this one of the easiest aspects of the process of project budgeting, especially if you’re using a spreadsheet software with 2 columns – Costs and Tasks. With this kind of software, you can calculate the totals easily.
- Add taxes and contingencies
When creating a budget, it is better to be safe than sorry. You cannot be completely confident about your final estimate because things in your project may change at any time.
This is why you must add taxes and contingencies to ensure that your project doesn’t go over budget as your estimated figure will be fairly close to the final costs you will spend. Project management experts recommend adding at least 10% of the total estimate as your contingency fund.
- Get your document approved
This is the last stage of the project budget process where you will discuss with your client, employer or investors for their approval of your project’s budget.