Six budgeting ideas for project management

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By Jim Lamzela

Special to Ontario Construction News

The project manager has a wide variety of tasks from the very start of a project to the time it is completed. From keeping an eye on the progress of the project, scheduling the employees, keeping a record of materials and scheduling tasks. Its easy to lose track and end up going over budget.

The following are some budgeting ideas for effective project management:

How to budget effectively

  1. Create a schedule

The first thing to do is to create a schedule that will designate the funds needed for each task involved in the project. Figuring out the labor and material for each task is extremely important. Estimating how much these expenses will be is the first step. If help is needed, engineers and architects should be utilized. Once these costs are determined, then the budget can be set up.

  1. Use a budgeting application tool

To determine more accurately the costs and track spending, the project manager should use a budgeting application tool. With so much of technology that is available today at your disposal, you can closely track just about every metric that matters to a construction site, including materials, productivity, equipment usage, and individual worker stats. This will help with estimating and reduce unnecessary processes and increase accuracy.

  1. Determine monthly costs

Determine the monthly cost of running the project. This should be openly documented for your team to keep everyone on track. Make note at the end of the month how you did in terms of budget. Nothing is ever perfect and you may be over or under, but this way you are keeping an eye on it. Checking in monthly allows you to make the necessary adjustments to the budget or resources.

  1. Monitor progress

Monitoring progress at every step of the project is extremely important. Keeping an eye on employee’s hours and overtime will help with labor productivity. Overseeing what materials are purchased allows you to keep costs under control and you can make changes in one area if another part of the project goes over budget.

  1. Control costs

Cost controls should be determined for timesheets and labor, vendor invoices, materials, hardware and software needed, and additional expenses. You cannot do it all yourself and you shouldn’t try. Dropping the ball on something could cause your budget to spin out of control.

  1. Allocate for unexpected costs

Clients that complain about a project going over the budget is one of the biggest criticisms that a project manager hears. We all know that not every project goes according to plan and that this can cause unrealized costs. This is the reason why it is recommended that at least 10% of the total budget should be allocated to unexpected costs. Most of the time, this will cause the project to finish under budget and will add to client satisfaction.

Jim Lamzela is president of DataBid.com.

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