In order to operate a successful project, you need to ensure that many things remain firmly under control. Your project scope should be known and documented, the duration and progress toward specified goals should be kept in mind at all times, and you need to stay within your project’s budget. Of all these things, staying within the budget is perhaps the hardest to do. From government agencies to small companies, going over budget is a very common problem. However, there are ways that you can not only remain in control, but to take back control when you start stepping outside those financial bounds.
1. Forecast, Forecast, Forecast
If you think that your budget should remain static, that it should stay the same from beginning to end of the project, then it’s time to rethink. One of the most common reasons for budget overruns is inaccurate forecasting on an ongoing basis. The costs associated with your project are going to change over time. Whether you have to pay team members overtime or you find that the cost of your materials has gone up from the supplier, you need to continually forecast your budget and costs so that you can keep your project on track.
2. Get Approval NOW
Once you realize that there are vital changes that must be made to the budget, get approval from your higher ups. Most project managers don’t have the authority to make wholesale changes to their budget with impunity – you need to ensure that you get the approval necessary to increase your budget. Not only that, but you cannot afford to put this on the back burner. It needs to be done as soon as possible in order to ensure that you don’t incur any further overruns.
3. Inform the Team
One benefit of tracking and forecasting your budget is that you will be in a position to alert your team members to the problem immediately, and often you can head off further problems in this way. Keep your team members in the loop and make sure that they are aware of any budget considerations, because this will impact their responsibilities, roles and jobs as a whole. It can also encourage more accurate time tracking on their parts.
4. Be Aware of Scope Creep
Like your budget, the scope of your project is likely to change over time. Client changes to existing plans, new goals, additional steps required to reach goals – these can all be causes of scope creep. A change in scope directly affects your budget and often in a negative way. Be aware of all changes to the scope of your project and realize that no matter how large or small those changes might be, they do have an impact on your budget. If the changes necessitate revisions to the budget, get approval from management for this right away.
With these simple tips, you can rein in your budget, cut out overruns and ensure that you have the right budget for your project.