The Project Manager’s Budget Checklist

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Categories: budget

budget checklist

I’m often asked: “What do I need to include in a budget?”

I figured it was time to put together a list of what should be included when you are putting together your project budget. So here goes…


Record any goods you need to buy. Record what you need to hire and the duration you’ll need it for. All these things should be in your procurement plan, so use that as a reference. Make sure you’ve put everything from your procurement plan into your budget.

Consumable supplies

Consumable supplies are different to equipment because they are things that get used up. For example:

  • Printer paper and toner
  • Food
  • Raw materials used in testing e.g. if you were manufacturing bricks, you’d need ‘test’ sand, concrete etc (I’m not actually sure what goes into a brick) and these would get used up during the test process.

Again, check the procurement plan to make sure that you’ve included everything you said you would need to buy.

Essentially, the difference between equipment and consumables is the difference between capex and opex.

External staff

Many projects rely on external resources, either from a manufacturer/supplier e.g. to help you install and set up new equipment, or as consultancy resource to do a particular skill e.g. requirements analysis.

Look at the equipment and supplies you need, and see if any of them have the requirement to rely on their own resource – if so, you will need to budget for the people to come with the goods.

Consider what services or skills are required, and whether or not you have them in house. If not, you should budget for buying in those skills e.g. test manager, specialist developer, auditor, health and safety expert, lawyer etc.

If you have to hire people from overseas, or have contractors who will charge in a different currency, read this article on how to manage multi-currency budgets.

Internal staff

Companies vary in how they account for internal staff. You may be expected to cross-charge a department for using internal resource on your project. Or you might be able to use the people “for free”. Check what your internal rules are.

Budgeting for internal staff is one of the hardest things to do on a project, in my opinion. You aren’t charged for their person at their salaried rate, so you’ll need to find out the appropriate charge to budget for.


Make sure your project budget includes applicable taxes at the relevant rate. Often, suppliers provide estimates without taxes included, and if you don’t increase the quote amount by the tax amount, you’ll find your budget is wrong.


Expenses relate to the costs for the people involved. Whether you are using internal staff, external staff or a mixture of both, they will likely incur some expenses for travel and accommodation. For example, if a supplier attends a meeting at your office, they will most likely charge for their travel to that destination, and hotel accommodation if they need to stay over, and meals.

Some companies also (or instead of) charge a ‘per diem’ which is a daily fee to offset incidentals that consultants away from home incur. It may include a meal allowance, newspaper, laundry etc, but instead of invoicing you directly for all of these incidental costs, the company charges you a flat rate per person per day.

Contingency/Risk management budget

Contingency funds are there to offset risk. Contingency planning can be in the form of time or money. Time also costs money, so either way, make your contingency explicit in the budget.

Management reserves

As well as contingency, it’s also worth including management reserves if you can. This is a figure put aside to deal with unknowns. However, you’ll also hear people refer to management reserves as the ‘contingency budget’ because sometimes they don’t know the difference, or because in their organisation, ‘contingency’ really does mean ‘money put aside in cases of emergency and we don’t know if we’ll use it up but it’s nice to have just in case.’

If you aren’t clear on the preferred jargon of your business, ask the question. Make sure you and your finance team (and sponsor) are talking about the same thing.

Read more about the difference between management reserves and contingency.

Watch this video for tips on how to reduce your project budget.

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budget checklist

Posted on: August 21, 2019 08:59 AM | Permalink

Comments (3)

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Elizabeth, Good Info but I would also consider dividing the above cost between soft and hard cost, at least this is what we do in Real Estate Development Projects especially when building a business case.

This is excellent. I would only add something for the contingency budget. Extend the time in blank.

What I mean is that you need to consider an extra time range when nothing will be done but where you are waiting for delayed vital supplies to arrive, there's a holiday in the other country, for some other company or department to read and approve whatever you send, for any given government to process any paper or permit...etc . It can sometimes be minimized if the H.R. know they wont be needed (or paid) during those days and if any rental can be stopped and redone to skip them. Otherwise that time could be used to speed up other activities, do general scrum-like reunions, or even do some team integration.

I've seen project's be exponentially delayed because of this, and often when speaking with the planner it turned out they didnt consider buffer time cost's could be minimized.

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