Project Management

The Money Files

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

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Recent Posts

3 Ways To Be More Strategic As a Project Manager

Introducing The Public Sector Advisory Community for Estimating

Setting Up Programme Budget Tracking

Quick Tips for the Testing Phase

Programme Management: Planning Your Finances

Introducing The Public Sector Advisory Community for Estimating

At the EVA conference in London in March, I had the pleasure of listening to Gary Hill, Co-chair of PsACE, the Public Sector Advisory Community for Estimating. He was talking about the importance of estimating and how the community helps shape the professional estimating done on public sector projects in the UK.

The purpose of the group is to simplify, standardise, systemise and professional project estimating process and capability across the public sector. He shared their vision, which is to bring together experts across government and client organisations to promote leading practice in estimating, underpinned by an ethos of trust and collaboration. I like how he talked about leading practice instead of ‘best practice’ because as we all know, there isn’t one definitive best practice for pretty much anything in project management.

He talked about how the community started in April 2019 when someone reached out to him and asked for help with something. “It started over coffee and turned into a beer,” he joked. The community sets out to address the problem that many project managers have in all aspects of our work: where do you go for advice, how do you know if that advice is any good and who says it’s good anyway?

To find out where good practice was in the public sector the community carried out a benchmark of 7 government departments where they measured good practice. Surprise, surprise, no department was good at everything.

Today, the community is sponsored by IPA, the Infrastructure and Projects Authority, which Gary said gives the community’s work more weight and more chance of making things stick. They really started to gain traction when they were mentioned in a government select community discussion, and membership started to grow.

It’s a volunteer-led community and Gary shared the common problem that many volunteer-led communities have: everyone wants to get involved because it’s a good idea, but everyone has a day job to do so it’s hard to get people to take on jobs.

Next up on the agenda for PsACE is to write to each permanent secretary in the UK government and ask them to support the community’s work, so that’s a large piece of stakeholder engagement to do.

In terms of what they actually do, Gary explained that PsACE was involved in providing input to the IPA estimating guide, and was represented on the committee preparing British Standard 202002 for Project Controls.

There are current workstreams covering:

  • People capability: creating a course on estimating
  • Data platform: collating data for benchmarking
  • An advisory panel: to provide deep dive reviews of papers and initiatives
  • Guidance for Senior Responsible Owners: to help SROs understand estimating
  • Group conference: to bring together the community for a conference
  • Leading practice: to identify leading practice and launch a maturity assessment.

I found it really interesting to see what a grass roots effort could do, and how powerful it is when experts come together with a common goal of simply wanting to share knowledge and do things better.

Gary shared his vision for the community, and I think it seems hugely realistic given the momentum behind PsACE at the moment. He talked about how the long-term goal is to align policy, data and expertise to encourage informed decision making to achieve more predictable outcomes. That’s something worth striving for, don’t you think?

Do you have a community like this where you work, in your industry? Let us know in the comments!

Posted on: May 10, 2022 04:00 AM | Permalink | Comments (1)

Programme Management: Planning Your Finances

Last month I looked at what you need to consider when setting up programme financial management, drawing on The Standard for Program Management, Fourth Edition (2017).

Today I wanted to write some more about financial planning at programme level (as we would spell it here in the UK), again, using The Standard as the foundations but sharing my experience as well.

The financial management plan for a programme

The Standard talks about having a financial management plan which is made up of:

  • Funding schedules and milestones (financial timeline)
  • Initial budget
  • Contract payment and schedules
  • Reporting activities and how reports will be managed
  • Metrics for reporting and controlling finances

This all fits into the overall programme management plan, but could be a separate document.

The document is supposed to outline a lot of information about how money will be managed during the work. It should go into detail about:

  • How risk reserves will be accessed and used
  • How the programme will deal with financial uncertainty e.g. international exchange rate fluctuations, changes in interest rates, inflation, currency devaluation etc
  • How the programme will deal with cash flow problems and if any are already identified
  • What the local laws and compliance regulations are and how these will be met
  • Incentive and penalty clauses in contracts.

In addition, as with all plans, you should include how the budget is going to be approved and what that authorisation process looks like.

In my experience, we did not have all this written out, although we did have a Finance team who were very much on the ball and probably had considered it without making it my job (thank you, wonderful Finance Manager!). In addition, the detailed technical budgets, which represented most of the cost (aside from staff) were put together by the technical architect, and were comprehensive. By the time it was my turn to look after the numbers, the paperwork seemed solid and it was very much a tracking exercise. I can’t take too much credit for the planning effort.

We were using international resources so the currency issue was very much relevant, and so was the risk reserve because we were doing something new to us with a high degree of uncertainty.

To be honest, I’m not sure we had a formal process for risk reserves either. Contingency had been added to the budget, but we did not allocate budget to risk management activities on a per risk basis. Given the scale of the investment, that was probably a mistake! I don’t recall any terrible dramas happening as a result of not having funding assigned in that way, even when the programme timeline was extended.

Contract payment schedules were documented in the contract instead. Our legal team bound up the contract and relevant schedules into little A5 booklets and I had one that sat on my desk and became my go to reference for all things to do with service level agreements, contract expectations and when I had to approve certain milestones to issue payments.

One time, I issued the payment notification and requested the funds be paid, but I had not warned Finance such a large request for cash would be coming so the actual payment was delayed a few days. That taught me I needed to start my process earlier so that Finance had notice that a large payment was due as part of our contract schedules.

Planning at a programme level feels harder because there is generally a bit more uncertainty, the timescales might be longer than your average project, more people are involved, and the numbers are higher. However, it’s never one person’s job. As you come together as a team, experts can provide their input to make sure the final result is something the governance team, finance team and programme management team can be confident with.

Posted on: April 12, 2022 04:00 AM | Permalink | Comments (2)

Types of Project Cost [Video]

Project costs feels like a topic I’ve revisited many times over the course of writing this blog (can you believe I started it in May 2010?) and today I want to use my monthly video to go into the differences between direct and indirect costs and fixed and variable costs. They are terms new project managers might get confused about and we hear them thrown around in discussions. What do they mean for projects?

In this video I share a few examples of each so you can get a feel for how these might play out for your work. If you want a text-based post to refer back to, then this article on 5 types of project cost also includes some information on the topic.

Do you have different definitions or examples to share? Leave a comment under the video as this community is better for all the different voices in it!

Posted on: April 05, 2022 04:00 AM | Permalink | Comments (0)

3 Categories of Estimating

Categories: cost, estimating

There are loads of different ways to estimate, from looking back over past projects and using that information to help you work out what this new project might need in terms of resourcing and costs to detailed modelling techniques and more.

You probably use a bunch of different ways to estimate, depending on what you are estimating and how much information you have about the thing being estimated. But did you realise that estimating techniques fall into three categories?

Two of those are the ones you probably studied on your project management courses: quantitative and qualitative. The third is a category that you might not have come across unless you work with agile or iterative techniques: relative estimating. Let’s have a look at each of those.


Quantitative (I hate typing that word!) is a way of estimating that relies on you having data and numbers to be able to make a definitive, mathematical estimation of how long things will take or how much they will cost. As the name suggests, this type of calculation is based on quantities. If you know how many of something you need (resource hours, bricks, units, etc) then you can work out the cost because you know (or can find out) the price for a single item.

Of course it’s not always quite that simple. If the cost of a brick is 1p, and you need 100,000, you might get a discount on such a large quantity. But basically, these types of estimating are quantity- driven.

Types of quantitative estimating include:

  • Analogous estimating
  • Parametric estimating
  • Bottom-up estimating

And you may have other techniques you use on your projects that rely on the same kind of approach: find the numbers that relate to the tasks and use them to extrapolate the total estimate for the project based on amalgamating all the figures for all the tasks.


Qualitative estimates are data-led. You don’t necessarily have quantities, so you need other ways of working out the time/cost. For example, how long will it take for the subject matter expert to update the policy? There’s an element of research in there, plus an approval process, and the time to write up and publish the new policy. That’s hard to quantify in terms of hours because it’s knowledge work, and we don’t use our brains in simple to understand units. You might get a burst of policy inspiration in the shower, or you might need a couple of days to let the ideas mull around in your head before you sit down and write the updates in 20 minutes.

Types of qualitative estimating include:

  • Expert judgment (that old favourite: the educated guess)
  • Observation (basing the estimate on what you see)
  • Interviews (another form of expert judgement: getting info from other people)
  • Surveys (sourcing info from the wisdom of crowds).

These are all suitable types of estimating that are OK in specific circumstances, and we do need a range of ways to size project work.


Finally, we come to relative ways of estimating. They are relative in relation to each other – the project tasks. I wouldn’t say these were particularly reliable techniques for estimating project costs (beyond resource time if that is chargeable) because sponsors tend to like actual figures for budget forecasts, not a statement about whether an activity is more or less expensive than something else. However, that could be useful information for a prioritisation exercise as it would help them understand what they could get for their remaining budget.

Relative estimating, when used for sizing project tasks, is about comparing the effort involved in doing the work to other tasks also on the table.

Types of relative estimating include:

  • Planning poker or T-shirt sizing
  • Affinity grouping

I use T-shirt sizing with my own work, although I don’t truly work in an agile environment. It’s a case of looking at the tasks (which, in an agile environment would be user stories) and deciding whether the effort involved is big, medium or small. In a team environment, we’d be doing that together but as a way to structure my To Do list, I do the exercise alone.

All of these types of estimating have a place in your toolbox and they offer a selection of ways to think about and plan our work. It’s easy to fall into the trap of thinking you have to use the same estimating method for every task on the project but you really don’t. Estimating approaches should be tailored to the task/activity/item. For some, parametric will be the standout winner and the most relevant way of working out the time required. For others, you’ll be relying on expert judgement or using planning poker to get a view of effort. Pick and mix your approaches from the three categories and you’ll end up with a rounded, appropriate way of planning your work.

Which of these categories do you use the most? Let us know in the comments below!

Posted on: December 27, 2021 04:00 AM | Permalink | Comments (6)

6 Ways to Forecast on Projects [Infographic]

Categories: budget, cost, estimating

How to you predict what’s going to happen on your project, from the perspective of performance? The infographic below shows a few different metrics and performance measures that you can use to forecast future performance – helpful if you want to know what your project’s results might look like before the end of the project, so you can make better decisions about what to do and how to use your time and budget effectively.

For more information about estimate to complete, estimate at completion, variance at completion and to-complete performance index, you can have a look at the PMI guidance on EVM and the ANSI Standard. Regression analysis and throughput analysis are other methods you could use.

Infographics can only give a very headline view, so there’s a lot more to say about each of these! Which of these forecasting calculations do you use? Or do you forecast using something different?


Posted on: November 09, 2021 08:00 AM | Permalink | Comments (0)

"A mind once stretched by a new idea never regains its original dimensions."

- Anonymous



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