{"id":19219,"date":"2021-07-30T00:00:00","date_gmt":"2021-07-30T05:00:00","guid":{"rendered":"https:\/\/blog.planview.com\/project-budgets-tips-estimating-cost-tracking\/"},"modified":"2021-07-30T00:00:00","modified_gmt":"2021-07-30T05:00:00","slug":"project-budgets-tips-estimating-cost-tracking","status":"publish","type":"post","link":"https:\/\/blog.planview.com\/project-budgets-tips-estimating-cost-tracking\/","title":{"rendered":"Project Budgets: Tips for Estimating &amp; Cost Tracking \u2013 Planview AdaptiveWork"},"content":{"rendered":"<p> <!-- .post-meta --><\/p>\n<p>Effective <strong>project budget tracking <\/strong>is essential to ensure that project costs do not spiral out of control &#x2014; and potentially threaten project success. This informative and easy-to-read article explores the basics of <strong>project budget tracking<\/strong>, including best practices and a 7-phase methodology.<\/p>\n<p><span style=\"font-weight: 400\">One of the most difficult tasks in project management is cost tracking and staying on top of project expenses. Tracking costs involves estimating budgets, establishing controls, measuring results, updating forecasts and continuous communication. It is an ongoing process that must commence at the onset of planning and remain in place throughout <\/span><a href=\"\/enterprise-project-life-cycle-initiation-closing\"><span style=\"font-weight: 400\">the project life cycle.<\/span><\/a><\/p>\n<p><img class=\"lazyload\" data-src=\"https:\/\/media.planview.com\/clarizen\/wp-content\/upload\/2018\/01\/budget.jpg\" alt height=\"400\"><\/p>\n<p><a href=\"https:\/\/www.clarizen.com\/work\/manage-project-costs\/\"><span style=\"font-weight: 400\">Successfully tracking costs<\/span><\/a><span style=\"font-weight: 400\"> involves a system of planning that begins in the early stages of development. The following are tips for estimating and tracking costs, but note, there is a specific order to execute precise cost tracking:<\/span><\/p>\n<p>&#xA0;<\/p>\n<ul>\n<li><b><span style=\"font-weight: 400\">Pre-Planning<\/span><\/b><\/li>\n<\/ul>\n<ul>\n<li><span style=\"font-weight: 400\">Estimate Budgets<\/span><\/li>\n<\/ul>\n<ul>\n<li><span style=\"font-weight: 400\">Establish Cost Controls<\/span><\/li>\n<\/ul>\n<ul>\n<li><span style=\"font-weight: 400\">Tracking Costs<\/span><\/li>\n<\/ul>\n<ul>\n<li><span style=\"font-weight: 400\">Measuring Results<\/span><\/li>\n<\/ul>\n<ul>\n<li><span style=\"font-weight: 400\">Update Forecasting<\/span><\/li>\n<\/ul>\n<ul>\n<li><span style=\"font-weight: 400\">Continuous Improvement<\/span><\/li>\n<\/ul>\n<p>&#xA0;<\/p>\n<p><b>Pre-Planning<\/b><\/p>\n<p><span style=\"font-weight: 400\">The first step is to sit down with your team and complete a <\/span><a href=\"\/manage-project-budgets-four-tips\"><span style=\"font-weight: 400\">realistic estimate of the project budget.<\/span><\/a><span style=\"font-weight: 400\"> Cost tracking involves examining every phase and their necessary resources. The plan should cover all activities within the project and contain sufficient contingency. At this point, everything should be accounted for. This includes all hardware, software and materials. Additionally, a project manager should include all labor costs to have a well-rounded idea of the anticipated budget. <\/span><\/p>\n<p><b>Estimate Budgets<\/b><\/p>\n<p><span style=\"font-weight: 400\">Once the estimate is formally signed off on by stakeholders, the initial money is invested. This is considered the baseline budget. What a project manager has in their hands at the beginning of the project is the starting point for all planning. <\/span><\/p>\n<p><span style=\"font-weight: 400\">Using your project resource plan and schedule, determine the monthly cost of running the project. The anticipated monthly expenditure should be openly documented for your team to keep everyone on track. <\/span><\/p>\n<p><b>Establish Cost Controls<\/b><\/p>\n<p><span style=\"font-weight: 400\">Now that you know where the money is allocated, it&#x2019;s time to protect it and make sure it is resourced properly. <\/span><a href=\"https:\/\/www.clarizen.com\/importance-cost-control-project-management\/\"><span style=\"font-weight: 400\">Establishing cost controls<\/span><\/a><span style=\"font-weight: 400\"> means assigning team members the ability to give permission and sign off on certain things. Different types of expenditures may require different signatures, but the idea is that it is never completely on the shoulders of one person. Cost controls can be determined for items like:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Timesheets and labor approval<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Vendor invoices<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Materials<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Hardware and Software<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Additional expenses<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400\">Delegation is key to cost tracking. You cannot do it all yourself and you shouldn&#x2019;t try. Dropping the ball on something could cause your budget to spin out of control.<\/span><\/p>\n<p><b>Tracking Costs<\/b><\/p>\n<p><span style=\"font-weight: 400\">In order to track something, it must be recorded. Make note at the end of the month how you did in terms of budget. Nothing is ever perfect and at times you may be over or under, but the idea is that you are keeping an eye on it. Checking in monthly allows you to make the necessary adjustments to the budget or resources to stay moving forward. Essentially, it allows you to better manage a project.<\/span><\/p>\n<p><span style=\"font-weight: 400\">The finance department will typically have this monthly figure for you and it should be tracked, recorded and announced to the team. Give kudos when they are in order and motivation when it&#x2019;s essential to keep the team moving forward<\/span><\/p>\n<div id=\"content-cta\">\n<div id=\"content-cta-text\">Increase your business agility with Planview AdaptiveWork&#x2019;s project management software<\/div>\n<div id=\"content-cta-button\"><a href=\"https:\/\/www.clarizen.com\/resource\/product-tour\/?refer=blogpost\">Take a Product Tour<\/a><\/div>\n<\/div>\n<p><b>Measuring Results<\/b><\/p>\n<p><span style=\"font-weight: 400\">At the end of each reporting period, it&#x2019;s important to calculate your metrics. Gauge how much money the project has spent out of the budget versus what you had expected to spend. The figures should be close if you have done sufficient pre-planning. Project reports should always include cost metrics and any other analytics necessary to explain your cost tracking. <\/span><\/p>\n<p><b>Update Forecasting<\/b><\/p>\n<p><span style=\"font-weight: 400\">This is a crucial step because we all know that anything can happen. Projects don&#x2019;t always go as planned and sometimes it is completely out of your control. What you do have control over, however, is your reporting. Make sure you are updating your forecasted monthly budgeting to reflect any changes that have taken place. <\/span><\/p>\n<p><span style=\"font-weight: 400\">The need to update can occur for a variety of reasons. The running costs can be higher or lower than you anticipated. Your forecasts could also have been inaccurate from the beginning of the project. You may have realized as you got into it that a resource was unavailable or had gone up in cost. As long as you update your forecasts and document changes, you&#x2019;ve achieved your part of the deal. <\/span><\/p>\n<p><b>Continuous Improvement<\/b><\/p>\n<p><span style=\"font-weight: 400\">No change can ever remain in place without <\/span><a href=\"http:\/\/www.clarizen.com\/product\"><span style=\"font-weight: 400\">continuous improvement and communication<\/span><\/a><span style=\"font-weight: 400\">. If something is going wrong, stakeholders will never know if you do not tell them. Creating transparency for senior management around cost tracking will allow you a little more freedom if things go awry.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Tracking costs and project budgeting isn&#x2019;t an exact science and nothing is ever guaranteed, yet project managers often feel like failure falls totally on their shoulders. If you always make an effort at proper cost tracking by pre-planning your monthly budget, establishing cost controls, measuring your results, adjusting forecasting and communicating with your people, you will be in a much securer place. <\/span><\/p>\n<p><\/p>\n<div class=\"client-logo\"> <a href=\"https:\/\/www.clarizen.com\/customers\/\" title=\"Siemens Energy\"><img class=\"lazyload\" data-src=\"https:\/\/media.planview.com\/clarizen\/wp-content\/upload\/2020\/08\/siemens_energy-200x100.png\" alt=\"Siemens Energy\"><\/a> <a href=\"https:\/\/www.clarizen.com\/customers\/\" title=\"IIROC Success\"><img class=\"lazyload\" data-src=\"https:\/\/media.planview.com\/clarizen\/wp-content\/upload\/2020\/07\/IIROC_logo-200x100.gif\" alt=\"IIROC Success\"><\/a> <a href=\"https:\/\/www.clarizen.com\/customers\/\" title=\"Financial Services Institution\"><img class=\"lazyload\" data-src=\"https:\/\/media.planview.com\/clarizen\/wp-content\/upload\/2020\/04\/FINANCIAL-SERVICES-IMG-200x100.jpg\" alt=\"Financial Services Institution\"><\/a> <a href=\"https:\/\/www.clarizen.com\/customers\/\" title=\"M Squared\"><img class=\"lazyload\" data-src=\"https:\/\/media.planview.com\/clarizen\/wp-content\/upload\/2020\/03\/m-squared-logo-200x100.jpg\" alt=\"M Squared\"><\/a> <a href=\"https:\/\/www.clarizen.com\/customers\/\" title=\"Aliancys Success\"><img class=\"lazyload\" data-src=\"https:\/\/media.planview.com\/clarizen\/wp-content\/upload\/2019\/12\/aoc_aliancys-logo-800x400-200x100.jpg\" alt=\"Aliancys Success\"><\/a> <a href=\"https:\/\/www.clarizen.com\/customers\/\" title=\"Bonfiglioli Success\"><img class=\"lazyload\" data-src=\"https:\/\/media.planview.com\/clarizen\/wp-content\/upload\/2019\/11\/bonfiglioli_logo-800x400-200x100.jpg\" alt=\"Bonfiglioli Success\"><\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Effective project budget tracking is essential to ensure that project costs do not spiral out of control &#x2014; and potentially threaten project success. This informative and easy-to-read article explores the basics of project budget tracking, including best practices and a 7-phase methodology. One of the most difficult tasks in project management is cost tracking and&#8230;<\/p>\n","protected":false},"author":205,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_editorskit_title_hidden":false,"_editorskit_reading_time":0,"_editorskit_is_block_options_detached":false,"_editorskit_block_options_position":"{}","footnotes":""},"categories":[35],"tags":[],"class_list":["post-19219","post","type-post","status-publish","format-standard","hentry","category-pmo-project-management-organizations"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.8 (Yoast SEO v26.8) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Project Budgets: Tips for Estimating &amp; Cost Tracking \u2013 Clarizen<\/title>\n<meta name=\"description\" content=\"Project budget tracking is essential to ensure that project costs do not spiral out of control. 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