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.

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7 Reasons to crash your schedule

10 Expert Tips for Project Budgets

5 Steps for Make or Buy Analysis (video)

8 Tips for better benefits management

5 Ways to make better decisions

5 Ways to make better decisions
Categories: tips

Projects need lots of decisions and often it can take a long time to get a decision made, especially if there are numerous levels of bureaucracy to get through. Time is money on many projects, and while I don’t often come across project teams sitting around waiting for a decision before they can move it forward, I am aware of several projects where stalled decisions have impacted delivery dates and tasks on the critical path.

Speedy decision making relies on people actually thinking the problem through, gathering data and coming to the decision – and, of course, speedy decisions are not always the best decisions.

When the decision is under your control, you’ll have to make it. How can you be better at decision-making? Here are 5 tips to help.

1. Consider the long view

Think forward: what decision would you wish you had made next month? Next year? In five years? Approving overtime might feel like the right thing to do now but how will you feel about it on your next project when you’ve already set the precedent and the team are expecting to be paid for extra hours?

Think about the long view as it relates to your decision. This will also help you put the decision in perspective. Remember back to when you took your school exams. I expect the results meant a great deal to you then, but you probably don’t even put them on your resumé any longer. The significance of actions changes with the passing of time, so think about how you’ll feel about  this decision in 10 years – you’ll probably realise that it isn’t that big a deal after all.

2. Cut out data

What data do you really need to make this decision? Strip away everything else. It might be nice to know the resource allocations for the next month, but if that doesn’t have a bearing on whether you accept a schedule change or not then they shouldn’t be taken into account.

Make sure that you are using the right data, not any data to make your decisions, and go for the minimum possible. This will help cut the mental clutter and make it easier for you to see what needs to be done.

3. Understand the impact

What’s the impact of this decision? What will happen if you don’t make it? Sometimes understanding the ramifications of a quick/slow/positive/negative decision can help you tackle it effectively (or at least gather the right information to help).

I’ve often found that the larger the impact, the easier it is to make the decision. Sometimes small decisions seem the hardest because there tends to be less clarity about  the appropriate route forward.

4. Lose the emotion

We all get attached to our projects and teams but it is best to take the emotion out of decision-making. Think about what is best for the project and the company. For example, it might be an unpopular decision to reject a change from the Marketing department, but if it doesn’t help the project meet its objectives and it costs a lot of money, then it isn’t a smart thing to recommend to your sponsor. After all, your sponsor can choose to accept or reject it – you are just putting forward an emotion-free assessment of the change.

5. Intuition isn’t always right

Many project managers report ‘going with their gut’ when it comes to making decisions or working out how to resolve problems on projects. However, the application of some technique does have benefits. Your intuition isn’t always right – ever been caught out in the rain because you figured it would be dry all day so no need for an umbrella? You can’t rely  on your gut when project dollars are at stake.

Choose the right data to support your decision. By all means include some ‘gut’ in your decision-making process but be able to back it up in case anyone asks you why you’ve made that choice.

What decision-making tips and techniques do you use, or do you tend to simply go with what feels right? Let us know in the comments.

Posted on: July 08, 2014 10:47 AM | Permalink | Comments (2)

5 Things for a Friday afternoon
Categories: tips

In his book, How To Be A Productivity Ninja, Graham Allcott talks about how to manage your time more effectively. It’s a good book, but one of the best things I took away from it was his idea of how you should spend your Friday afternoons (assuming that your working week finishes on a Friday).

He recommends spending time working through a weekly checklist and clearing out your email inbox, reviewing your To Do list, updating your processes, consolidating notes from the week and preparing ahead. So what does that look like in practice? Here are 5 things that you can do on a Friday afternoon to clear your head for the weekend and start the following week with the least possible disruption.

1. Clear your inbox

Allcott is a huge fan of ‘Inbox Zero’ which means not using your email inbox as a dumping ground where emails go to die. He thinks we should all clear out our inboxes, and when better to do that than a Friday, when you’ve got all the messages from the week to look over and deal with.

Go through your inbox and delete anything that can go. File anything that you need to keep for reference. Forward any messages that require other people to do actions on the project with instructions on what you are delegating to them. Anything that takes less than a couple of minutes to do, do now. You’ll probably have to put any other email-related tasks to one side as otherwise you won’t get the rest of your Friday afternoon checklist done.

2. Update your To Do list

What actions have you written in your project notebook or stuck on sticky notes around your monitor this week? Consolidate all that into your master To Do list. I take this a step further by writing the 3 most important tasks for Monday on a sticky note and sticking it on the front of my laptop. Then when I get my laptop out of my bag on Monday morning I know exactly what I should be focused on.

3. Update your files

Make some time to update your filing system and files. Create new folders for stuff if you need to. Otherwise, make sure that your project schedule reflects reality, and that all the risks and issues have up-to-date statuses.

4. Prepare for next week’s meetings

What are you up to next week? Book train or travel tickets. Check meeting room reservations and who is coming to your meetings. Send out agendas if you haven’t done so already, or call round the venues and sort out coffees and teas for people on arrival. It’s easy to put these little admin tasks off during the week but it’s getting a bit late now and you don’t want to be issuing driving and parking instructions on the morning of the meeting, so sort it out now.

5. Review what’s going to stop you

Finally, Allcott suggests thinking critically about what is going to stop you achieving your goals next week. That could be anything from a project team member being off ill, to not having the template for this quarter’s budget submission, to not being able to find time on your calendar to meet with the project sponsor. Once you identify the things that are going to hold up your progress, you can start to think about what you can do about them (if anything). Anything major can go on your project risk log. Anything that is more about your personal productivity can either be dealt with or accepted. Having this time to think about blockers will hopefully make them less stressful when they do happen next week – it’s another sort of risk management to do.

That seems a lot to me for a couple of hours on a Friday, because your project team members won’t stop emailing you or asking questions, and your project sponsor will still expect a weekly report to be produced in the same time slot or to turn up at your desk unannounced and ask for the latest earned value figures to take to the board. But give it a go. I think a period of updating and reflection on the last working day of the week will certainly make it easier to leave the project behind at the office. What do you think?

Posted on: March 10, 2014 11:57 AM | Permalink | Comments (2)

What’s your USP?
Categories: recruitment, tips, training

One way to distinguish yourself from the other project managers in the department is to think about how good your grasp is of project finances. This is often an area where project managers have weaker skills because not all projects require them to balance lots of books and sometimes big projects even have financial analysts assigned to them so they don’t have to worry about working out the detail themselves.

So if you want to set yourself apart and develop a USP (unique selling point – something that makes you different from everyone else), building your project financial skills is a great start. You can then demonstrate how much value you add by being able to explain the project financials to your C-suite stakeholders.

Show you have a grasp on project finances

When asked, you should be able to talk knowledgeably about your project’s budget and whether or not you are on track. If you don’t have the figures to hand and you’ve been caught in the corridor by an exec who wants to know, explain that you don’t want to tell them the wrong thing and that you’ll check when you are back at your desk. Then follow up and email them the right figures as soon as you can. Of course, if pushed, you can always give a ballpark figure.

Show you understand the business case

Ideally, when you discuss your project with C-suite stakeholders (or anyone else, for that matter), you should be able to demonstrate that you have an understanding of the financials of the business case. If the project is going to deliver some kind of return on investment, then you should understand how that is going to be calculated. If there are other financial benefits, make sure you understand those and how the project deliverables and the work the team is doing will actually end up generating cash when the project is complete.

Work with your finance team

Get to know your finance department! They are a source of lots of useful information so find out what help they can offer you and make use of them! Even if they don’t have the staff to be able to dedicate lots of time to your project they can often help with ad hoc queries especially when it comes to things like invoice processing, year end processes and accruals.

Educate yourself

Be aware of context that your project is working in. For example, is the company under some financial strains or is there pressure to spend a certain amount of the department budget before the end of the year?

Also make sure that you understand the financial terms that you are likely to hear when it comes to company budgets – ROI, IRR, payback period and so on. Check out my videos on these subjects if you need a refresher.

Think big picture

How does your project fit into your programme and the business strategy overall? This will also help set you apart as in my experience many project managers don’t have the ability to think about the bigger picture overall and focus very much on their own projects and getting those done (although this is changing). Being able to see the big picture is a further way to demonstrate your value to the C-suite and to set yourself apart from your fellow project managers.

Showing that you have a grasp on your project finances and how this affects the project and the company overall brings a touch of reality to business case, and helps you explain your project’s contribution to your team members as well. Make your business savvy the way you distinguish yourself from the competition at the top level – it really can set you apart in the quest for a new job or for recognition in what you do.

Posted on: February 17, 2014 10:52 AM | Permalink | Comments (0)

5 Project Management New Year’s Resolutions
Categories: general, tips

How did you do with sticking to your resolutions from last year? If you are anything like me, you would have started out with good intentions and then forgotten all about them as the snow melted.

This year it's not too late to make some resolutions about managing your projects more effectively, and make them achievable so you’ll actually stick to them throughout 2014. There’s no point in setting yourself unrealistic targets, so let’s look at some project management resolutions that you could still be doing next December.

1. I will do timesheets (and get my team to do the same)

If you don’t use timesheets already, make 2014 the year that you start. They are essential for finding out where your time is actually being spent, and you can use the data for loads of things including improving your estimates.

Do them regularly and you’ll find that you aren’t blocking out 7 hours per day to a bucket task called ‘project management’. You’ll get the granularity of detail required to understand exactly what your project management effort is being spent on – reporting, budgeting, team management and so on. And then you can assess whether that’s reasonable or not.

Break down your resolution into manageable chunks such as:

  • Quarter 1: Select project management timesheet application
  • Quarter 2: Implement application and train staff
  • Quarter 3: Bedding in time, we all start using it
  • Quarter 4: Aim for timesheets to become business as usual.

2. I will understand what the Finance team actually does

How much do you rely on your company’s Finance team to help you understand and manage your project budget? They are the experts about your business’ financial processes, forecasting and managing budgets, so you may as well use them. On some projects, you may have a financial analyst allocated to the project team on a full or part time basis too.

Here are some videos to help you get started understanding the role of the different Finance teams:

3. I will improve my estimating

How good is your estimating? If you feel that your project team needs to understand why estimating goes wrong and they could do with a bit of help when it comes to getting their estimates spot on, why not make that the focus for 2014? There’s a lot that you can do to help the people in the team manage the estimating process more effectively, and also estimating tips that you can give them.

Here are some more video resources to review:

4. I will include financial updates in my reports

Project status reports don’t always include a section on finances. This could be because your project sponsor isn’t that interested, or because you are sharing the information with people with whom it wouldn’t be appropriate to discuss the project finances with. But if your reports don’t include a budget update, you should be clear why this is – don’t just leave it out because it’s too hard or because you don’t know what to include.

Talk to your sponsor about what he or she would like to see in your status report and provide budget updates as required on at least a quarterly basis.

5. I will quantify the cost of risks

Does your project risk log include the financial impact of risks? Many don’t, because many risks aren’t quantified like this (or at least, many project teams don’t bother to quantify them like this). Of course, quantifying your risks in a financial way may not be appropriate for all the risks on your log. There are probably some risks that affect the project in ways that will not have a financial impact, or where you’ll be trying to calculate the financial impact based on some arbitrary figures.

But there will be a financial cost for many project risks. This is either the cost of the risk occurring or the cost of the mitigation plan – either way you can calculate the impact and then add this to your project budget so that you are clear about what implications the risk has on your financial planning for the project.

Will you use any of these as your resolutions for 2014? If not, what are you having as your resolutions instead (if any)?

Elizabeth Harrin is Director of The Otobos Group, a project management communications consultancy. Find her on and Facebook.

Posted on: January 13, 2014 09:02 AM | Permalink | Comments (3)

A big project problem: 5 ways to see the big picture
Categories: methods, tips

PrioritiesAs a project manager, there’s one big problem on projects – you are right in the middle of it. You have tight deadlines, unforgiving stakeholders and detailed plans. It is very hard to lift yourself up out of this and see the bigger corporate picture – many project managers can’t do this at all.

You should try.

Being able to see the bigger picture puts your project in context. It helps you operate more effectively. It helps you see what is important to your project and business customers. It makes you a better member of the company, as well as a better project manager.

Here are 5 ways to ensure that you can see the big picture.

Go to internal networking events.

Every company has them. And if, for some reason, yours doesn’t, start one. Got to lunch and learn events. Go to afternoon briefings, or drinks after work, or corporate team building days. Don’t opt out of anything. You never know who you might meet, but more importantly, what you might learn about the company’s focus. You can use this to sharpen your project’s focus to deliver what is really important to the business.

Read the annual report.

Yes, it’s boring. But it is also a great source of information about how the company operates. How does your company make money? If you sell shoes, it’s pretty obvious, but many firms have more complex ways of bringing in the cash. How will your project contribute to this? Is there a strategic thread where your project fits (or is it clear that your project is now irrelevant to the new corporate strategy?).

Read the business pages.

Follow your industry. Not project management, but the industry your company operates in – IT, construction, engineering, retail etc. What’s happening there? What are your competitors up to? Set up a Google alert for the name of your company and your CEO. How does your project fit with what your CEO talks about in the media?

Join an industry body.

In the UK, BCS, The Chartered Institute for IT, represents the interests of the IT arena. It’s not the only IT industry body, but it actually doesn’t matter which one you join. The point is to have another way to find out what’s happening in the big wide world. Read their magazines. Go to their events. Join their LinkedIn discussion groups.

Ask questions.

If you don’t know what terms like ROI, IRR, BCR and payback period, ask (or watch my videos). Talk to your managers, customers and suppliers. What is important to them? How is your project helping?

Being able to see the bigger picture lifts you out of the detail and helps you operate in a project leadership role. How do you make sure that you know what’s going on outside of your project?

Posted on: July 22, 2012 06:36 AM | Permalink | Comments (5)

"Get your facts first, and then you can distort them as much as you please."

- Mark Twain