The Money Files

A blog that looks at all aspects of project and program finances from budgets and accounting to getting a pay rise and managing contracts.

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4 Tools for Project Cost Control (and where to use them in the project life cycle) - Video

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What does the average project manager look like?

Categories: recruitment, reports

The Arras People Project Management Benchmark Report contains a useful snapshot summary of responses by job title this year. It means we can take a look at what an ‘average’ project manager looks like, if there is such a thing. Bear in mind that the survey is mainly targeted at UK project managers although there were a fair few responses from those working outside the UK.

Let’s meet our average PM.


  • He is male: 75% of the project managers responding to the survey are male (and that figure has stayed broadly the same for as long as I can remember reading this annual report).
  • He works in the UK.
  • He is aged between 35 and 59.
  • He has at least one degree (a Bachelor’s degree) and is quite likely to have a Master’s too. Most likely his higher degree is in project management or is an MBA.


  • He has more than 10 years of experience in this role…
  • …and considers himself a practitioner rather than an expert or a foundation/junior member of the team based on his assessment of his education, professional accreditations and experience.
  • He has domain knowledge as well as project management knowledge.
  • He is PRINCE2 certified with further accredited training courses in leadership and managing people.
  • He holds membership to a professional body.
  • He’s aware of Agile but not using it and doesn’t hold any Agile certifications. That’s probably because his company doesn’t use Agile.


  • He works in the private sector.
  • He’s an employee, not a contractor or self-employed.
  • He earns between £40,000 and £49,999 a year: the average salary for respondents was £47,180 in the UK.
  • He leads new product development or service transformation projects.
  • He has no direct reports.
  • His span of control is less than 10 people.
  • His budget responsibility is either significant (£5m to £10m) or nothing at all.

Does any of this sound like you? Nearly 45% of the respondents to the Arras survey identified as project managers so this is data from a very representative sample.

Let’s have a look at some of the outlier responses and create a different sort of project manager.

The outlier

  • The outlier is a woman.
  • She’s under 24 with a PhD and membership of a professional body that isn’t PMI or APM.
  • She has hardly any experience and works in defence.
  • She has no domain expertise alongside her project management knowledge.
  • She manages a team of between 8 and 10 and earns either under £25k or over £75k. She manages budgets of £501k to £1m.

This really doesn’t sound likely as a profile, does it? It’s a collection of the least common responses from people in the survey, but it doesn’t hang well together as a pen portrait of an atypical project manager. I could extrapolate from this that the ‘average’ project manager I constructed above from the most common responses to the survey is also not a particularly accurate profile.

Statistics are useful – in this case they help set salaries and responsibilities for people in professional project management positions. But they need to be considered in context.

Get a copy of the survey and see the details for yourself here.

Posted on: March 25, 2015 10:45 AM | Permalink | Comments (4)

How to read a bridge (and use one on your project)

Categories: methods, reports, tips

A bridge is a way of displaying financial information in visual format. You might also know it is as a waterfall chart, or ‘the one with the flying bricks that looks like something from Mario’. It’s just a way of showing how an initial position has been affected by subsequent changes, so you can see why that would be useful for a company’s financial position. It can show changes that are positive and changes that are negative, and ends up with the new cumulative position as you can see in this diagram.

This picture shows a completely made up scenario, but I think it illustrates a point. In September, the starting position for this department was $75,000. This could represent value, profit or anything else. Then there were some things that changed. These are illustrated by the small floating boxes: the first change that happened was a positive improvement of $16,000. Then there were some other criteria, inputs and changes that also increased the situation positively.

Now we come to the black boxes. These on my chart represent money out, so let’s say this department spent $2,000 on some new software licences and $1,000 on a big party for everyone. This has had an impact on the net position so if my maths is right, the closing position on the graph, the situation in October, is now $100,000.

Great. But how is this relevant to projects?

Typically this type of bridge is used to represent financial information and you have financial information on your project, don’t you? I think it is a great way to present the impact of changes on your project budget to stakeholders. It’s useful because it’s a good visual representation of how you got from there to here and where the money went.

So you could use it to show the financial changes on your project, but there is nothing to stop you using the same layout to display other sorts of changes. Take this version, for example.

This shows you the situation in September in terms of project days. There are 150 days allocated to this project. Then there are a number of changes put forward. The green boxes show what would happen if you add those changes – the number of days spent on the project goes up (it’s not rocket science really). There are also some changes that save you time on the project. Let’s say that the big one, the 20 day time saving, is because the project sponsor has decided that the overseas office isn’t going to be included in this initiative after all, so there is no need to train those team members and you can save a whole lot of time. Another little change knocks 3 days off your project total.

If all these changes are approved, your project will now take 152 days.

When you are looking at individual changes at the change board, some stakeholders might find it hard to keep approving changes that add time. Two changes that add 10 days each? That’s huge. But when they see all the changes on the table that month laid out like this they can see that approving them all only adds 2 days to the project overall. That’s a very different story.

Of course, you might not want all those changes approved – there might be some stupid suggestions in there or functionality that would be better pushed off to a Phase 2. But using this bridge diagram gives you a new way to present the same data to stakeholders and help them decide on the impact overall.

I hope you find it useful!

Posted on: September 16, 2014 05:20 AM | Permalink | Comments (0)

Improving Project Status Reports

Categories: reports

Project status reports include financial information, but also a whole host of other things related to the project’s progress. But are yours actually getting read? And do your stakeholders make decisions or act on the information in there?

This is a common problem for project managers, that and the fact that they are time-consuming and a bit boring to produce anyway. My new online course and ebook, Better Project Status Reports, aims to change all that. It even includes an option where I’ll review one of your status reports and help you make it better.

You can find out more about it here.

And it’s got a money back guarantee if you change your mind at any point or decide it isn’t for you.

Drop me a line if you need more information or have any questions!

Posted on: November 21, 2013 03:15 PM | Permalink | Comments (0)

Show me the money: the 2012 Arras People Project Management Benchmark Report

Categories: reports, research

Pile of moneyThe 2012 Arras People Project Management Benchmark Report is out - the 7th annual study of the project management industry that the company has produced. The company surveyed over 2000 project professionals, mostly UK based. This year, there were some interesting results reported around budgets and salaries.

What's your budget?

Nearly a third of project managers are responsible for budgets between £1m and £5m, which is the category that had the highest response rate. Programme managers manage the larger budgets, with 37% managing between £1m and £5m and 29% having a budget of over £5m.

Contractors have responsibility for larger budgets than employed project managers, which surprised me. They also typically have more staff working for them - again, I found this surprising. It shows that contractors aren't just brought in to fill recruitment gaps but to take the lead on significant change initiatives with significant spans of control.

How much do you earn?

The survey looked at salary movements. 83% of respondents reported that their salary increased by less than inflation in 2011 - a virtual pay cut. Unsurprisingly, the public sector was the worst hit, since the pay freeze was announced. Over 60% of public sector workers reported that their salary hadn't changed, compared to under a third of private sector project workers. The average salaries were:

•   Project manager: £43,762

•   Programme Office and Portfolio managers: £57,560

•   Programme manager: £58,788

•   PPM Consultant: £67,237 (and 46% of them feel worse off than they did last year)

For mid-range salaried jobs, the public sector is the place to be. Many more employees earn in the £35k to £50k range than in the private sector. If you want to earn more than about £55k, move to the private sector - that's where the higher paid jobs are.

If you get a bonus at all, it's likely to be up to 8% of salary according to the survey. Only 2% of people receive over 25% of salary as a bonus, so if you fall into that category, consider yourself lucky.

Contractor day rates also took a dive, especially at the lower end of the pay scale. Where day rates were already low, it looks like hiring managers have squeezed them even further.

What's next for salaries in 2012?

The experts at Arras are expecting it to be another tough year for the public sector. 95% of public sector survey respondents are predicting no change or less than inflationary change in the coming 12 months.

Private sector workers are expected to fare better. Nearly two thirds of project professionals are expecting to get a rise this year. Arras is predicting that there won't be huge increases (for huge read over 5%) but that salaries will increase this year.

21% of contractors are predicting that their rates will decrease over the next year - not good for those already suffering the effects of rate declines in 2011.

So in summary, 2011 was tough and 2012 is likely to be a little bit better, but not much. However, project and programme work still remains well-paid and sought after, so it is still a good employment sector to be in.

How do you think salaries and bonuses will evolve in your country over the next year?

Posted on: March 26, 2012 03:22 PM | Permalink | Comments (0)

Is your project budget red?

Categories: budget, reports

As part of your project status reporting you probably include metrics. You might even have a project dashboard that calculates the metrics from an enterprise PM tool and displays them for you. Project metrics are things like resources consumed and estimate to complete. Some metrics mean more to stakeholders than others. Personally, I am not a fan of percent complete for tasks, for example.

As least one of your project metrics should relate to your budget – assuming you have the responsibility for tracking how much the project is spending. There are a number of different ways to track the budget, for example:

  • Earned value management metrics
  • Variance to forecast
  • Percent of total budget spent
  • Budgeted estimate at completion

Again, project stakeholders will respond better to some measures than others. It depends who they are, what they want, what they need to do their jobs and what their previous experience is. A project sponsor with a finance background is likely to want a far greater degree of visibility of your budget than someone whose main focus is quality. Your job is to find out what they want and provide it.

It really doesn’t matter what the metric is that you use, provided it fulfils two criteria:

1.      It must make sense to the people who are using it

2.      It must have clear boundaries defined so that you all know what ‘red’ means.

There is no point in having Red, Amber, Green (RAG) or any other categorisation method (click here for a Gantthead discussion on how to categorise projects) if no one knows what the different categories mean.

Set thresholds. Define what the tolerance levels are for each metric and publish them. Then stick to them. Your budget RAG status could look like this:

Green: within +/-1% of budget

Amber: within +/- 5% of budget

Red: over +/-6% of budget

Choose figures that make sense to you: 1% of a £5m is not very much in the grand scheme of things so you could probably agree different tolerances with your project sponsor. As long as you are clear about what ‘Red’ means, everyone will be operating from the same information and your metrics will be meaningful.

How do you define Red?

Posted on: February 16, 2012 03:11 PM | Permalink | Comments (0)

"I'm not saying anything. There is no message."

- John Lennon



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