Tips for Managing a Project Budget More Effectively

Ashley Halsey | February 12, 2020

Managing a project budget can seem stressful, but it’s quite simple if done right. Let’s look at some tips for managing a project budget effectively.
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Being put in charge of the money end of a project is a big responsibility. Done well, you could help to find major success for your team and to save everyone a lot of heartache, headache and, well, money. Done badly, you can single-handedly derail the whole thing.

It’s pretty evident then that it’s an important part of the job that you need to do well or else you could find that you’re in a difficult predicament. Managing a project budget can seem very stressful, and as we know the consequences for mistakes are indeed serious, but in many ways, it’s quite a simple task if taken on correctly. But you need guidance. So, let’s look at some tips for managing a project budget effectively.

Always Keep the Worst-Case Scenario in Mind

When prepping for a serious project it’s important that you start out by creating a spectrum for the project, from ‘absolutely giddily optimistic’ all the way down to ‘this couldn’t have gone worse if we’d tried’. That spectrum is going to be valuable for everyone on the team but will be of particular use for you at the money end.

“Budgeting becomes a lot more guided when you have a worst-case scenario in mind that you can base your budgeting on. You never want to budget with everything going according to plan because things inevitably go wrong”, says Craig Knight, a  financial advisor at Writinity and ResearchPapersUK. When things do go wrong, you want to be in a position where you can adapt to deal with those issues, something which will require money in the bank.

Keep Everyone in the Know

There can be real caginess when it comes to discussing money — something which I’ve always found to be exceedingly frustrating, particularly when working on projects. Money is not a taboo. A project needs money and the people on the project need to know how much money there is to temper their expectations.

As you move money about and distribute resources for the project, keep people up-to-date with what you’re doing. You don’t want someone to plan a big move thinking that there is money in the budget for it, only to discover later that you’ve given it away. Transparency is a good policy for ensuring that people trust you and feel like they are being supported in the best way possible.

Remember Budget Management is an Ongoing Task

Before a project starts, there will be an important meeting, or series of meetings, during which the budget and where it’s needed will be discussed and decided. That’s a vital phase that dictates a lot of what is achievable with the project and gives you, as the budget manager, great guidelines for how you will continue throughout the project. That said, there’s more to it than that.

“As the financial manager, you need to be doing constant analysis of the state of play, as it unfolds. Projects can be complex things that require adaptation and flexibility as they go on. As the money behind it, you need to be ready to adapt your own estimations to fit the newly updated facts and figures”, explains Emily Sakamoto, a business writer at Lucky Assignments and Gum Essays. The job doesn’t end until the project has fully finished.

Use Technology

There are so many different tools available to project budget managers today that demand to be used. Connected to the idea above of an ongoing task, the technological solutions for expense and expenditure tracking are astounding and whatever you could possibly want is available.

You need to keep connected to your budget in all senses as it is distributed and used. Monitoring results and linking them back to budget allocation is an amazing way to maximize efficiency. Purpose-built software makes that job a whole lot easier and can improve the quality of life on the project to no end.

 

Hopefully, these tips will give you a good launching off point for your project budget management. Again, it’s a high stakes job but not one that should overwhelm you too much. Everything you need to do is perfectly achievable. Keep a level head and keep looking for help when you need it!

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