Running a project requires lots of funds; sometimes, it can take your budget off-track. Before planning the project, we plan our budget. Completing it within the limits of the outlined-budget is a complicated job.
Project expense is something that you must handle efficiently with care and precision. Wisely managing your project time and expenses is the success mantra for any project. Though it is not an easy task, with effective methods, you can easily manage your time and expenses. For tracking project expenses, you first need to estimate the project cost. First, identify the potential project on which you are going to spend.
Then, estimate the related cost values and prepare a realistic budget for your project. Based on the budget, make plans on how you should spend your funds.
Not everyone is good with numbers and calculations, so here are some of the ways that will help you monitor how you are spending your funds and save your time and expense.
Table of Contents
1. Plan system and methods
For tracking the time and expense in a project, it is important to design a system or method through which you can keep track of your expenditure. This system will make things easy for you to track every single pound you spend on processing your project.
For a small-scale project, you can use Excel to keep a track record of your expenses. While working on a large-scale program, you need well-designed project management software that can help you keep all your expenditure records, including time and expense, in one place, and you can track your project expenses. Apart from having dedicated project management software, it is also important for you to decide and check how will you do it, when will you do it and who will do it.
2. Identify and note items in the budget
Before tracking your expenses, it is important to identify the budget items on which you will spend your funds. So, firstly identify all the necessary budget items you may need and prepare a list of it.
The budget items can be equipment you will use in your project, the resources you need for running your project, all the legal items, real estate, expenses on the marketing strategy you will use, etc.
Other items that can impact your budget include all the expenses on travel and lunch break. These items, i.e., lunch break and travel, seem small expenses, but taking a whole company or project team at large, they can affect your overall budget.
3. Create and approve your budget
Identify and list all your budget items including, the equipment you will use in your project, resources you need for running your project, all the legal items, project management software, travel, lunch break, etc. Going through the budget items identify your various costs and expenses, whether they are variable, fixed, or recurring.
While you are planning your budget, always make cost estimation for a specified period which means, you should either mention the timeline of the funds you will spend or a specified date of the expense. Mentioning a proper timeline will help you track how you spend your funds and for what duration. After framing your realistic budget, go to the financial services department for its approval.
4. Make templates
Creating a template is the most helpful practice in keeping track of the expenses of your project. Create a template or form for all the purchases that will happen during the project lifetime.
Make some important requirements in the form like, who is purchasing? Item of purchase, the reason for purchasing the items, and time of purchase. Any team member or stakeholder before making any purchase should fill this template or form and should get an approval from the authority for the same. By doing this, you can easily track your time and expenses and avoid unnecessary spending of funds.
5. Appoint a budget manager
Asa project manager, it is quite challenging to handle every area of your project. The responsibility of project management is not easy, and with that, if you have a budget to handle, then the project seems more like a burden. So, to work efficiently, it is better to assign a team member with the responsibility of managing the budget.
His/her day-to-day responsibility must include identifying the budget items and listing them, going through all the expenses of the purchase, and track the budget in detail. Share the responsibility but not the authority. Make sure you get an approval or signature on the list of budget items from senior authority to avoid any future problems. Even some of the organizations have a protocol of getting an official signature from the authorities like accountants or senior management to validate the list of budget items.
6. Real-time tracking
To ensure a successful project, you must keep a real-time check on all the expenses you make. By keeping a real-time check, you can easily identify how you are spending your funds? Are your expenses losing track from the budget you have made? This real-time tracking can help you control your unnecessary expenses.
Tracking your project expenses plays a major role in deciding the success factor of your project.
Working on any project needs a well-defined, realistic budget, and tracking and controlling your project expenses can help you run your project efficiently. Tracking your project expense can help you identify where you are overspending and underspending your funds. Controlling your time and expenses that you will spend based on the demands is difficult. But these methods defined above work a great deal in helping you trace your project expenses and manage your project successfully.