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Top Tips For Keeping Work Projects Under Budget

It is good to achieve objectives or goals set for a work project, but the achievement of these goals with the least amount of resources is equally as important. Productivity occurs in having effectiveness and efficiency in the right balance.

There are some essentials that you must work through and make sure you get right before starting any project. Here are some tips you should consider for your future projects:

Understand the Scope of the Project

Top Tips For Keeping Work Projects Under Budget - Scope

Project Management Institute (PMI) emphasizes the importance of scope knowledge area, which makes it one important step in keeping your work under budget. You can’t be guessing on this one; you have to spend more time by looking into all the nuts and bolts of the project. Most successful projects finish within budget because they followed the scope management process.

Thorough research is needed to ensure you get an accurate scope. There has to be a clear identification of the work that is required to successfully complete or deliver a project. Your major responsibilities are to ensure that only the required work is performed and for its completion within the stipulated time and budget.

The scope of the project should cater for the boundaries of the project, set the responsibilities of each team member, and set up the process for how work would be verified and approved. The scope of the project must be communicated to your team so everyone is on the same page.

Develop a Budget with Good Estimates

Top Tips For Keeping Work Projects Under Budget - Budgets

When it comes to developing estimate costs for your budget, be realistic and factual. It is important to get input from all stakeholders. You want to get a well-researched and detailed value of the items in the budget.

More importantly, build a contingency budget. There are things outside your control you would need to factor in. This includes environmental factors that could impact the pricing of supplies, labor, resources, financing, currency exchange rates, and so on. Depending on the fiscal and monetary policies of the government, inflation could occur during the execution of your project. Sign pre-contracts and ensure vendors deliver on their promises.

Working closely with stakeholders–most importantly suppliers would enable you to set a realistic budget, even with unforeseen circumstances that might impact costs. Don’t allow yourself to be caught off-guard in the middle of a project.

Consider and Assess the Risks

Top Tips For Keeping Work Projects Under Budget - Risks

There are risks involved in every project. Some risks would cost you to lose money and time. It is important to assess the risks you would face in executing a project in order to be able to mitigate it. There are internal risks that can arise from your team members and internal stakeholders, and there are external risks that could arise from suppliers and the government.

Identifying your risks at the start of the project with your project team will really help you get the project kicked off in the right direction. Doing this will give you accurate and realistic budget expectations from your stakeholders and your project team members.

You might also want to consider switching to different ways of doing certain jobs. If you’re spending a lot of money on your staff who is constantly messing up your inventory, you might want to switch to something else. Inventory software reduces human error, and you won’t have to worry about not fulfilling orders because of inventory levels that aren’t accurate. Business owners may not want to change the way of doing things, but sometimes it is necessary.

Work with Performance Indexes

It’s not possible to keep a project under budget without developing key performance indicators (KPIs). They help you compare actual budgets to proposed budgets, and the extent to which the project’s actual budget differs from the proposed, and so on. They also help you monitor team members, in order to ensure they only get paid for the work completed.

Some of the KPIs include: Actual Cost of Work Performed, Cost Variance, Earned Value or Budgeted Cost of Work Performed, Planned Value or Budgeted Cost of Work Scheduled, Return on Investment, Schedule Performance Index, Cost Performance Index, and more.

Use Project Management Tools

You need tools to collaborate with your team members and monitor their progress. A project management tool can be useful for many reasons. You can have all your work in one place, you can monitor and control your team members, and you can also constantly communicate with them throughout the day without flooding their emails.

A key part of staying on budget is to make sure all team members are aware of the current budget status as well. With a project management tool, you can keep team members informed of the budget status, and make them accountable.

Do What’s Best for Your Company

It is important for a manager to take proactive steps when undertaking a project to ensure the efficient use of resources. You want to get the right facts and figures involved in the project, before starting out or even assembling a team.

At the end of the day, you need to make the best choices for the success of your business. You want each project that goes on in your company to run smoothly, but this isn’t as easy as you think. With the proper steps, running your projects efficiently and keeping them under budget will become the new norm in your business.


Also published on Medium.