When working on a particular project, preparing the project budget template is, probably, one of the most important things you will have to do. It’s always best if you set its timeline right at the beginning of the plan so that you can assess how much it’s truly going to cost you. However, if you’re a newbie at this and the mere idea of creating a budget seems daunting, fear not. Here is a great project budget template which you can use whenever you feel the need.
The Perfect Project Budget Template – Three Simple Steps
Step 1. Estimate what Are the Anticipated Costs
The very first action you must undertake while trying to create a project budget template is to estimate how much all the activities will cost you regarding dollars. Here are the categories at which you must take a look while you do this.
- Personnel – how many people are you going to require? Do you need to hire some more apart from your current employees? Will they be working part-time or full-time? Will they need to be paid overtime?
- Equipment – how much are the equipment and tools going to cost you? Do you need to buy them all or do you already have them?
- Fringe benefits – take a look at mandatory taxes, retirement plans, life insurance, and compulsory payroll taxes.
- Consulting – Will you need to hire some consultants for this project? Can you use the ones you have in-house?
- Suppliers – how much will the supplies cost you? Can your suppliers offer some discounts if you buy in bulk?
- Travel – will there be any need for you or any of the staff involved to move during the length of the project?
- Additional – List all the extra costs which you think might appear.
Step 2. Justifying the Budget Outline
Once you have prepared the outline of your project budget template, you will have to justify it. Justifying a budget means sending the appropriate financial institutions and authorities data and documentation which will prove that your budget is justified. The aim of this process is to explain if the costs which you set are valid or not and if they will be sufficient for your project.
You can perform budget justification by following these three steps.
- Review every single cost category you set so that you can make sure it is accurate.
- Confirm the overheads. Your reviewer will contact the finance department to ask for the info he or she needs to analyze the estimates. They also use the information to confirm if the project is appropriate or not.
- Summarize the review.
Step 3. Ensure That All the Costs Are Effective
Your project budget template is effective only if it will cover all the costs. For it to be considered cost-effective, you must also have no underestimates or cost overruns.
There are two cost-effectiveness ratios which you can use to evaluate your project budget template.
- Average cost-effectiveness which equals the total project costs over the project effect.
- Marginal cost-effectiveness which equals the change in total project costs over the change in project effect.
Building a project budget template has never looked easier if you follow the steps we outlined for you. Although it is a highly complex process, it becomes a lot simpler with the correct plan in motion.
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