How vital is the project manager role in budgeting?

In a project whether big or small, a corresponding budget is in place to keep the project going. Every project stakeholder’s concern is if the project is working within a specified allocated budget. Now it’s the project manager’s responsibility to see to it that this is what’s taking place.

The project manager’s role is very significant in budgeting for a project for he is the one who determines the project costs and project budgets in line with the stakeholder’s specifications and resources. The project manager plans for the budget allocation, collaborates with the project stakeholders and project financial coordinators to build a sensible budget plan that will sustain the whole project in all of its phases. Imagine if the project manager fails to estimate the costs properly, it will result in an overhead expense in the budget and the risk of project closure may be possible. This is the worst possible scenario we are trying to prevent.

What does a Project Manager needs to include in their budget plan? Here are some of the things you need to consider in making a budget plan that will work for your project.

1. Employee Salaries and Compensation- This part of your budget includes the salaries, wages, benefits of all people included in your project. Include all those working full time and part time. Don’t forget to include the benefits and incentives that are included in your employee’s contract.

1. Outsourced services- this includes those contractual work you hire for a short definite time, included are those one time services that you might need for your project.

1. Equipment and Supplies- this covers the expenses for all the supplies and equipments used in the project as well as their maintenance.

1. Travel/Related Expenses- this includes the transportation expenses incurred. You can include parking fees, transportation allowances, and gas expenses.

1. Other expenses- You should plan for unexpected expenses and furthermore allocate a budget for this. Indirect costs and Overhead expenses are also included in this section.

Another thing you need to remember in budgeting is it is a constant process. It does not end at the planning stage of the project. All throughout the project you need to refer back to your original budget plan and re evaluate. Changes may be deemed necessary as you go along and discover unexpected expenses along the way. Again in budget and costs planning these events are needed to be foreseen to avoid such unexpected occurrences which can put your budget plan off track. Whether you are meeting the required budget allocation or you are incurring overhead expenses, these are things that are needed to be monitored constantly to meet specific agreed upon conditions. Don’t worry if you are going over board on expenses just keep track of it and from there find ways on how you can effectively get back on track in your expenditures.

A good way to estimate your project costs will be to use a project management software tool that can provide estimation. Being diligent in managing expenses and continuously monitoring your budget plans are important tasks a Project manager needs to accomplish to be effective in budgeting.