Updated July 24, 2023
Introduction to Project Budgeting Template
The term project budgeting template includes all the financial information concerned with your project under consideration. The potential information that is expected to be included in the project template can vary from the estimate of the money your project required for the successful completion, including all the resources and materials at the same time.
Monitoring the project template can help in reducing the cost from escalating beyond an estimated figure. We can customize a project budget template to include Red, amber and green codes. The red code will indicate that whenever the budgeted figure is breached, appropriate action can be taken immediately, and that’s where the project budget template proved its worth.
What is Project Budget Template?
Creating a project budget template is a critical and vital part of project management which is concerned with managing the budget with projected figures. We can build our own project budget template, which can be customized according to the requirements of the situation. The templates can be downloaded from a number of online sources at the same time. A well-drafted and defined project budget template is one that is created with predicted figures to be in line with accurate figures.
Following is the screenshot of the Project Budget Template for illustrative purposes only.
Understand Project Budget Template
The project budget template is one of the most widely used tools in project management by the project managers to evaluate the project’s approximate cost. As already mentioned in the above section that the project budget template includes all the relevant financial information like the expected cost to be incurred on the project. The project could range from small to big one. For instance, the big projects like infrastructure, construction or commercial mall or buildings, and the project’s budget template could be printed on a number of pages due to their long span of the period to completion.
The cost being involved in these projects is generally huge and includes, for instance, labor cost, material cost, and cost of operations. As these projects’ nature is very dynamic, they need to be monitored continuously and required to be updated accordingly. At the very outset, before the project is initiated, the product managers have to provide an estimated figure of the cost of the project, and then once the project is started, the product manager has to make sure that the cost being incurred remain with the budgeted one and if the cost is breached the reasons should be looked into.
What is the Need for Project Budget Template?
A particular project is the outcome of any tasks being divided into a number of small tasks. As these small tasks are completed individually, they are consolidated to arrive at the final project. In other words, we could say that the project is divided into a number of tasks, and the project is said to be completed when these individual tasks are completed. The project takes a long process to be completed, and it does not come free. There are many resources being employed in the project process to complete the same in time. For instance, a large number of employees will be required, for which the human resource team is required to invite applications for the same. A large number of inputs or materials will be required to operate the project for which the vendor will be selected on the basis of the lower cost of the tender.
To ward off this complexity of the project, the project budget template is created to allocate the cost after careful consideration of each task. The project managers should make sure that the project progresses according to the budget template.
It is required and expected that the cost is estimated to close to the actual ones. There is always an uncertainty that revolves around any project due to internal as well as external factors, and these uncertainties increase the complexity and difficulties at the same time in the successful completion of the project in time. With the project budgeting template, these uncertainties can be reduced to an extreme extent, the reason being that you already have budgeted figures, and projects can be monitored progress accordingly.
Following is the cost, which is easy to estimate. For instance,
- The cost of raw materials
- The cost of labor
- Professional and advisory fees
- Fees for any software license
- Traveling expenditures
Following are the cost which varies according to the project.
- Insurance charges
- Medical expenses
- Cost of equipment machinery
- General administration charges and expenses
- Telephone and communication charges
- Meals and entertainment expenses
Key Points to be Remembered
The following are the major factors to keep in mind while creating a project budgeting template.
- Project managers should make sure that all the assumptions concerning the project under consideration should be well documented. If the assumptions are documented, then anyone refers to them when in need or to see the progress of the project and if it is in line with budgeted numbers.
- Project managers should make sure that the project budget template should have some contingencies for any unexpected costs that may be cropped up in the future, which could delay the completion of the project to some extent.
- When creating the template project manager should involve all the possible population who is related to the project in one way or another. The input should be contributed by all the concerned persons so that the cost can be estimated as close as possible. But the cost should not be overestimated too much.
- The project manager should have a better understanding of all the costs and resources being employed or required in the process to finish the project. He should make sure that all the concerned costs associated with repairs and maintenance of the equipment and machinery are included. At the same time, the project manager should make sure that times are appropriately noted as off for individuals. Any overtime is also taken into consideration in the project budgeting template.
- Adequate consideration should be given to timelines as well. The project manager should not overestimate and underestimate the time the project will take to complete the task. Overestimate could result in project conflicting, which would subsequently delay the entire project completion time or deadline.
- The project manager should carefully monitor the project budget template. He should make sure that there should not be any diversion from the budgeted figures unless otherwise, a situation arises, making it necessary to make some changes in the budget template. Any deviation from the budget should be communicated to all the concerned departments and persons.
This is a guide to the Project Budgeting Template. Here we discuss the introduction to Project Budgeting along with the understanding and need for this template. You may also look at the following articles to learn more –