There are different types of project cost – your budget isn’t made up of one big lump of cash. Although it can sometimes feel like that!
Understanding the different types of project cost is helpful because they help you review the different categories of spend. You can use mindmapping to check that you haven’t left out any budget items.
The infographic below shares the 5 different types of project costs that you should consider for your budget. However, what it doesn’t make clear is that the project cost categories overlap. You can have fixed direct costs and variable indirect costs, for example. Sunk costs remain sunk!
Within the different categories you can break down your budget even further. For example, cost of quality might be something you consider for your budget formulation, but it could be a fixed, variable, direct or indirect cost, depending on how you are going to build quality into your project.