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OK, this might not be relevant to everyone reading, but sometimes project managers are left with ‘spare’ budget in December. How are you going to make use of any available funds – assuming you are not under pressure to give them back – to maximise project value. Here are some ideas.
Conduct a year-end financial review
First, make sure your budget trackers and up to date, and that everything that should have been accounted for has been added on. That will give you a true picture of your actuals, so you can review the financial status of the project, including how much budget is left and what key areas need funding.
If you need to move money around, talk to the finance team so that the right amounts can be journalled to the right budget lines to tidy up your accounting.
Prioritise high-impact investments
Next, think about where you could use leftover budget in the remaining weeks of the year to make the most impact. That could be new tools (testing software licences are always a win), training for project team members, especially if that will help them develop skills they will need next year, or risk mitigation activities. Perhaps you can buy a few days of consultancy time that will speed up a particular task? Perhaps there are licences that need renewing, or equipment that you could invest in? Perhaps you could talk to suppliers about getting a discount if you place an order now instead of in January – many suppliers have targets to hit at year end and might be open to negotiation.
I think that spending money on training and certification is a good choice. It helps team morale as individuals see that their future is being invested in, and you get skilled team members who have the skills required to continue to support the project, or future projects. So my recommendation would be to look at investing here, in team development, if you aren’t sure what use you can make of additional funding.
If you need to buy anything, make sure to get approval and move quickly before the year end deadlines.
Don’t spend for the sake of it
We want to avoid wasteful spending. Be aware of what is going on in the rest of the organisation. For example, other projects might be struggling, and the most prudent thing is to always offer the money back to the ‘pot’ as a first point of call.
In my experience, budget that is not spent is not carried over to the new year unless it can be accrued against a committed spend. In other words, if you have got £20k sitting waiting to be spent, there is a high chance that you will lose it unless it is spent on something. Talk to your Finance team to find out whether that is likely to apply to your budget, and what they recommend you do at this time of year.
Work with Finance to reallocate funds
Talking of working with Finance – they are the guardians of spending rules and regulations, and they will help you maintain compliance and an audit trail for spend.
They will know if it is possible to carry budget over – and it might be, if your financial year does not end in December.
Posted on: December 16, 2024 08:00 AM |
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