The Money Files

A blog that looks at all aspects of project and program finances from budgets and accounting to getting a pay rise and managing contracts.

About this Blog


Recent Posts

5 Expert Tips For Managing Virtual Teams

4 Key Terms for Earned Value

5 Common Project Budget Problems (and How to Fix Them)

Making the Most of Tools for Communicating About Your Project

Project Finances in the Initiation Stage [Video]

5 Expert Tips For Managing Virtual Teams

Categories: virtual teams

Managing virtual teams is a skill. You can learn how to do it better, but getting the best out of a virtual team takes practice.

Let’s give you a head start. I spoke to five experienced project managers about how they manage virtual teams.

Here is what they had to say about making working virtually a success.

Paul Nicholson

I have gone to great lengths at times to actually meet someone in person. This is particularly true of suppliers that don’t want to come in. I go there instead. The cost is worth it, especially if they are international.

We are increasingly working with European suppliers. Meeting them seems to be the key and conferences are good opportunities for this.

Paul Nicholson, MBCS, UK

Helen Curel

Keep the lines of communication open. Meet face-to-face either in person or via video conferencing as often as possible. Even conference calling is better than relying solely on emails.

Listen carefully to what the team are saying and seek clarification if things aren’t crystal.

Helen Curel, UK

3. David

Oooh, difficult one... This is a subject where I know I have lots to learn, but:

  • Try to at least have a kick-off where everyone can attend in person. It's much easier to work with someone virtually if you've at least met. If a physical meeting can't be arranged (e.g. for financial reasons) do a video meeting where everyone introduces themselves, their background, what they hope to contribute, in what way they themselves hope to benefit from the project etc. (Inform everyone beforehand that this is going to happen so they can prepare).
  • If there is a big time difference (e.g. between continents), do not just schedule online meetings to fit into the "overlapping" working hours, but also vary them.
  • Action lists from meetings are especially important to make sure tasks are known and get done. A virtual Kanban board (e.g. Trello) is often a good idea.
  • Keep track of who talks the least during the online meetings and actively "pull them" into the discussions.
  • Schedule regular one-on-one online meetings with as many people as possible.
  • Invite feedback on how well (or badly) the team thinks the virtual team works…

David, Sweden

Claire Sezer

Communication is key. Regular update calls, followed up with action task lists specifying who is doing what and by when. Don’t assume anything is being taken care of. Always double check.

Claire Sezer, FCILEx, UK

Dave Gordon

One-on-one calls are important when you have a virtual team. Dealing with a problem or individual task follow-up on a team call that you could have resolved with a phone call to one or two team members wastes everyone else’s time.

Dave Gordon, USA, who blogs at The Practicing IT Project Manager and is on Twitter as @PracticingITPM

The Common Theme: Communicate!

Virtual working is often chosen because it has a stack of  benefits, not least that it can be cheaper as there are no office overheads, less requirement to travel and you can use outsourced (i.e. cheaper) resources from wherever in the world is best placed to provide them.

As you can see, communicating is a key strand that runs through all these pieces of advice. A virtual team needs as much, if not more communication than a co-located team. Reducing the ‘virtual-ness’ of a team will help them gel much faster and give you a greater insight into how to get them working together productively so that the work can progress at pace.

Got any other tips for making virtual teams work successfully and not just turn into a cost-cutting exercise? Let us know in the comments below.

Posted on: February 01, 2016 11:59 PM | Permalink | Comments (10)

4 Key Terms for Earned Value

Categories: earned value

Whole books have been written about Earned Value, so I won’t be able to go into much detail here. However, it’s worth having a little refresher on the key terminology, and if you haven’t come across Earned Value before, hopefully this is a gentle introduction to some of the language you’ll hear often.

To recap, Earned Value is a way of assessing project progress and lets you compare performance across projects. It can help spot trends in performance. It combines scope, schedule and cost and looks at project progress holistically with all of those elements included.

Earned Value

Earned Value (EV) is the value of the work performed. It’s the word ‘value’ here that caught me out for a long time. However, once you understand the terminology, the rest of EV becomes much easier. Project Management for Dummies (yes, that’s on my shelf and I refer to it often!) defines EV like this:

The earned value of a piece of work is defined to be equal to the amount you planned to spend to perform it.

In other words, it’s the original budget for a task. I think the terminology avoids using the word ‘budget’ because this means something very specific in EV and ‘the amount you planned to spend’ could also include resource time that is not costed in the same way as buying a cement mixer or other resource.

Planned Value

Planned Value (PV) is the amount of budget that you’ve planned to use up at a particular point in the project.

The Dictionary of Project Management Terms (another of my go to reference books) explains it like this:

Sum of approved cost estimates (including any overhead allocation) for activities or portions of activities scheduled to be performed during a given period. Also called: budgeted cost of work scheduled.

Ah, ‘budgeted cost of work scheduled’. That makes a lot more sense, doesn’t it?

Actual Cost

Actual Cost (AC) is one of the easiest to get your head around: it’s the actual cost, expressed in terms of money, for the project to the specified date.

You might also see Actual Cost of Work Performed (ACWP) which relates to the total cost for doing a task or set of tasks during the time period you’re referring to. It includes direct and indirect costs, so it should be a complete and comprehensive cost for the activities.

Budget at Completion

Budget at Completion (BAC) is also quite straightforward to understand. It’s the amount you are forecasting to spend for the project at the point that the project will be finished: in other words, the total planned expenditure.

Think of it as what has been approved: it’s what your project sponsor says you can spend to get you to the end of the project, hopefully based on your realistic and practical estimates.

With these bits of information, and a few others, you will be set to start crunching the numbers and running the formulas to start producing your Earned Value information.

Posted on: January 25, 2016 11:59 PM | Permalink | Comments (8)

5 Common Project Budget Problems (and How to Fix Them)

Categories: budget

Here are 5 common project budget problems and how to fix them. If you’ve got other suggestions for dealing with these situations, please let everyone know in the comments below!

1. Contract Expenditure is Overrunning

You’ll notice this hopefully before it causes a big overspend on your project. Your company has entered into an agreement with a supplier and now the bills are starting to rack up. This could happen if your agreement is on a time and materials basis, or a fixed price plus extra costs for changes to scope.

How to fix it: Find out why the costs are overrunning. Is it because your team is putting through too many change requests, which is hitting a contract clause that lets the supplier charge more? Or is something else at play? Whatever the cause, pin it down and work from there. Involve the supplier as well, so that they know that you can’t afford, or choose not to afford, to put up with those costs going forward. You may end up renegotiating the whole thing, but better to do that early than to put up with overspends for too long.

2. Resource Expenditure is Overrunning

When you have to pay for internal or external resources, the costs can soon mount up. It’s not difficult to find yourself with spiralling resource costs, even if they are just wooden dollars being moved between departments.

The most likely causes are poor estimating and too many change requests.

How to fix it: It’s often hard to drill down into the detail of where a resource is spending time, especially if you don’t have a timesheet application. If you don’t record time, then start doing that first! It will really help you improve your estimates over the longer term.

Short term, you need to sit down with your team and reforecast the whole project. If you then can’t afford to do all the work that you’ve planned out, you need a frank conversation with your project sponsor about what can be taken out of scope for this phase.

3. Managing Risks is Costing More

In fact, the common problem here is when you didn’t budget anything for project risk management. Then a risk pops up and you’d like to do something about it and can’t because there’s no money allocated for risk mitigation or to exploit a positive risk.

How to fix it: It’s too late to go back and ask for a risk budget now… or is it? You might find your sponsor open to that kind of conversation, and it certainly doesn’t hurt to ask.

If you don’t have additional money available then you have to adjust your activities accordingly. Perhaps your project board could accept a higher level of risk for that element, or they would be prepared to compromise on something else. Put together a proposal that explains the risks, the costs and the benefits along with some options so that they have choices.

4. You Can’t Access Management Reserves

Ah, the mythical management reserve. This hits project managers who have sponsors that are poor at following through on their promises. The sponsor says that there is some kind of ‘contingency’ or ‘management reserve’ that can be spent at their discretion if required, say, in the event of an unplanned project disaster.

Said disaster happens and suddenly they don’t have authority to access those funds, or another project has used them, or you need to write a business case to access them…

How to fix it: You will struggle to fix this one in advance but your best bet is to make sure that you have full confidence that any pot of money that is being held outside your official project budget does actually exist and is there for you. Of course, the best thing to do will be to manage the project so you don’t need to tap into additional reserves.

5. You Can’t Track Expenditure

This happens when other people are spending your project budget and not letting you know where it is going. The first you hear about resources being acquired or a deal being signed is when the invoice gets passed to you from Finance with a big question mark written on it.

When this happens you can’t accurately keep track of what is being spent, and whether it is being spent on the right things.

How to fix it: Sort out the process for spending money. Make it clear to the project team (even those people who are more senior than you) that purchase orders have to go through you for tracking, even if you don’t have the authority to actually sign them. Let the Finance team know as well so that they can be copying you in on requests and making sure that the process is adhered to. They have no interest in receiving invoices that can’t be paid or getting the company into debt with inappropriate suppliers so they will be on your side!

Posted on: January 18, 2016 11:59 PM | Permalink | Comments (6)

Making the Most of Tools for Communicating About Your Project

Categories: communication

If you want to let people know about your project, you need to tell them.


And in lots of different ways.

In my last article about project marketing I wrote about the different ways of getting your message across that you could use from your intranet to a leaflet campaign.

Varying the tools you use to talk about your project is important because people need to hear the same message between 3-5 times before they start to believe it. After that it begins to lose its effectiveness.

It’s more interesting for them to hear it in a variety of ways. And you’re more likely to catch people who have a personal style that means they respond better to different approaches. For example, the intranet isn’t going to be very useful in reaching people that don’t spend a lot of time in front of a PC, like your catering staff. They might prefer to hear about your project through the staff magazine. When you vary your tools you improve the chanced that some of what you are talking about is going to go in.

It’s also beneficial for individuals to hear the message from different people, including someone more senior than them whom they respect. Look for ways that you can include quotes from your Project Board members or invite them to attend events with you.

Avoiding Information Overload

With all this communication happening and the different tools, and the repetition, you’ve got to be careful about creating a balance so that you can avoid information overload. People can and will be fatigued by your messages. You could probably give me examples of marketing messages and advertising that you see so often, like billboards at the side of the road, that you stop noticing it’s there.

Unfortunately, there’s no scientific method for working out when that is going to happen, so I can’t give you a rule to apply. My best tip is to create a communications calendar to run alongside the rest of your communications plan so you can easily see which messages are going out when and to whom. Then you can judge if one audience is receiving too much at any one time, or conversely, not receiving enough.

Be visual

Another way to help balance your messages is to be visual.

YouTube is the second largest search engine after Google, with over 1 bn unique visitors per month. Pinterest was the fastest growing social network in 2014, seeing a 97% growth in active users. There’s no doubting that pictures help get your message across.

A study from at the University of Minnesota found that presenters who used visual aids were considered 43% more persuasive (pdf), and as you want to be persuasive about your project it will help you to include images.

Go visual with video

You’ve also got the option to use video. It’s not expensive and you don’t need professional kit to do it any longer.

Here are some screenshots from a video we made about a big software implementation. Originally the project sponsor and I planned to travel to each of the 40 locations to discuss the impact and answer questions directly from a wide group of stakeholders. When we looked at the logistics it wasn’t practical for us to take that much time away from managing the project to solely focus on this communication strand. So we made a video what we would have told them face to face.

You can see here a mix of talking heads, tour round the new servers, screenshots of the software and panning shots of people at work. This was a software project, so even if you are creating something like software that isn’t as visual as, say, a construction project, then you can still create interesting videos with a mix of participation from the project team. It’s fun and engaging for project team to do as well.

This video was watched by key people at all locations and we had excellent feedback on it. You can see how many times your videos are watched through a simple count on YouTube but if you do publish on YouTube then make sure you do so as a private video so only those people with the link can see it.

For us, the video was a simple way to promote the project, reach a wide audience and give people a consistent message without having to meet them individually. On the plus side we probably reached more people than town hall style meetings. On the negative side I had to rely on phone calls, emails and capturing queries via the intranet instead of hearing and responding to questions face to face in real time. There are payoffs and choices in every communication decision!

For more information on project marketing and the tools you can use to communicate about your project, watch my PMXPO talk on the topic. You can get it here (and claim a PDU at the same time).

Posted on: January 11, 2016 11:59 PM | Permalink | Comments (6)

Project Finances in the Initiation Stage [Video]

Categories: video

You first think about how much a project will cost in the initiation stage.

At project initiation, cost management and project financials are really about understanding. Understanding what you are doing and why, and how much you get out and how much you need to put in.

Firstly, consider whether it aligns to the organisation’s financial strategy, and whether it will create a suitable return. You’ll also want to work out how long it will take to get this return, or work with your financial management team to do so.

The project charter should include a description of the financial success of the project and how it will be measured.

You’ll use these as the success criteria for how the project will be judged on financial performance at the end.

You might be able to add costs to any risks mentioned at this point in the project charter.

The tips here are all discussed in more detail in this book Project Management Accounting. It’s a great primer on the financials relating to projects and it goes into a lot of detail so it’s handy for beginners and those with more experience.

Posted on: January 04, 2016 11:59 PM | Permalink | Comments (1)

"I find that the harder I work, the more luck I seem to have. "

- Thomas Jefferson