Project Management

How to Handle Management Reserves [Video]

From the The Money Files Blog
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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 GirlsGuideToPM.com.

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Categories: budget


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.

I explain more about how to handle management reserves in this video.

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how to handle management reserves

Posted on: September 02, 2020 08:00 AM | Permalink

Comments (2)

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Very interesting, thanks for sharing.

It's a fine coverage of the subject matter. It's important to be convinced that the contingency reserve is real and that the management reserve can be accessed when doing so becomes unavoidable. Of course, since management reserve remains within the top management's strict control, being able to handle one's project without any recourse to management reserve is the best option. However, since we must be practical and pragmatic in our thinking and approach, as Elizabeth rightly advised, it is good to do all we can to be sure that if management reserve needs to be accessed, such access will not be unattainable.

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