A project budgeting calendar
From the The Money Files Blog
by Elizabeth Harrin
A blog that looks at all aspects of project and program finances from budgets, estimating and accounting to getting a pay rise and managing contracts.
Written by Elizabeth Harrin from RebelsGuideToPM.com.
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Date
I could have also called this post: What money stuff do you do when?
I should start by saying that it’s difficult to give you a complete rundown of what project budgeting activity needs to happen when in the month or whenever in your project, because each company is different. So this article will cover what I think is common practice based on the project managers I work with and coach.
Project start up
At the beginning of the project, before the ‘doing’ of the work starts, you should:
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Work out what budget you need.
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Agree budget and tolerances with those in authority.
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Agree contingency funds and the process for accessing them.
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Negotiate any big purchases or put arrangements in place with suppliers.
Remember to write all this stuff down as part of your project initiation documentation.
Project delivery
During the activity part of the project where you are completing project work and achieving targets towards your deliverables you should be:
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Raising purchase orders and issuing them to vendors
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Approving invoices
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Reviewing contract terms and supplier's performance against the contract
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Completing internal processes to get suppliers’ bills paid.
Each month on the project
Every month you should be updating your project records and doing the following:
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Track what orders have been raised and received.
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Approving any cross-charges from other departments or projects.
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Review what you’ve spent.
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Review what you plan to spend.
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Panic if there is a discrepancy against your actual budget – just kidding. Work through any discrepancies and reforecast as necessary.
Every couple of months on the project
Every so often – I’d do this every two months on shorter projects and every three on longer ones – review these bigger ticket items to see what your status is:
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Review tolerances and get them changed if they no longer seem appropriate.
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Review spending on your contingency budget and check your forecasts, ‘handing back’ any money that you no longer need, for example when a particular risk has passed.
If your project falls over the year end financial accounting period you should also be preparing for anything that you might need to do in order to satisfy the internal processes around that. For example, managing accruals. If you’re lucky, someone will do this for you!
Project closure
At the end of the project you should:
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Tie up any contracts and draw the arrangements to a close.
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Migrate any project-related contracts or purchasing agreements that will be maintained long-term to an operational business team who can manage them day-to-day after project closure.
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Prepare a final statement of your project budget.
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Let everyone know that the project is over. No more cross-charges!
What else would you add to the list? Let us know in the comments.
Posted on: April 14, 2015 09:34 AM |
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Comments (6)
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Hi Elizabeth,
Very Informative. Thank you Very much.
Sudarshan Harshe
PM III MBA Operations PRINCE2® SIX SIGMA| Fidel Softech
Pune, Maharashtra, India
I got some different view...From financial aspect; Thanks!
Do not see any further scope of adding to the list. Good post Liz.
Thanks for your comments, guys!
Mary Jo Leatham
Director of ICT| Irish Wheelchair Association
Dublin 7, Ireland
Hi Elizabeth,
Very clear guide - thanks!
Only one item, very much dependent on the organisation of course, but it would be useful to be aware of your organisation's budget forecasting cycle. In particular for deployment and ensuring that accurate post go-live BAU costs are included.
Regards, MJ
Thanks, MJ. That's a great addition to the list.
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