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Managing your budget for project success

Thu 10th Sep 2015
Budgets can make or break a project, and therefore need to be managed with extreme care. You can deliver on every aspect of a project, but if the budget is blown doing so, it over all result will be considered a failure. Whilst outside influences often impact budgets beyond our control, being able to minimise any affects or keep on track will determine the outcome for a project.
Here are our tips for effectively managing your budget
Review. Review. Review.
Keeping a track of the budget at every stage is a must for maintaining control on a budget. Failure to review will cause problems further down the line, when it comes to budget management the wiat and see approach is rarely a good idea. Having full details of a budget against plan through out every stage will help you to understand where you are. Of course budgets do run over, but you are going to make better decisions if you know where you are at a given point and the snow ball effect is lessened. A small budget over spend is easier to claw back through later stages when you are aware of it. Small decisions regarding getting things done quicker for more money or use alternative methods but save some expenditure can make a huge difference in light of a full budget review.
Review the future of projects to ensure the resources needed are properly allocated and accounted for. Know what resource you need when and which you do not need. Underutilised resources cost money, and can be hugely expensive. For instance having a team on site but unable to perform a task as the previous stage over ran will increase staffing costs as they will need to return on another dates – doubling the staffing cost for that particular element.
Stay on track.
Manage the outcome of the project within the confines of the budget realistically. Do not under estimate the effects of additional work here and there throughout a project. Ensure you re estimate costs for any mid project changes and forecast the effect on the budget as soon as possible. If a budget needs to change it is better to make adjustments at the start of the project rather than present a client with an enhanced bill at the end.
Let the whole team in on the budget, and let them understand the critical factors. When a team understand the issues and are empowered with the information they can make better decisions or bring fresh ideas to the table. A team aware of issues are likely to respect their charges to you as they understand the limitations of the budget.
Make sure people know who can authorise spend on a project and how much they can authorise. This will help to keep track and adds a sense of responsibility for that person which should result in them taking better care when approving or rejecting spend. Teams where many people are authorising spend can be difficult to track and it is easy for invoices to get lost or be forgotten about in the short term – but be sure will be found out eventually!
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