Free Project Budget Templates (Excel) – Planning Worksheets

Project Budget Planning Template

A project budget template creates an itemized summary of intended project expenditure at each phase involved before completion. It is a financial management and planning document that indicates how finances will be managed to achieve a project’s objectives.

Planning and management are crucial to a project’s success, especially considering the limited resources of time and money. Budgeting helps execute the project while remaining within the cost constraints and delivering the required deliverables. The importance of a project budget cannot be stressed enough. Primarily, it is required for estimating the total costs of a project. Once the total project costs are determined, it is used to determine project feasibility based on projected costs and benefits. If the budget is determined to be viable, it can be presented to stakeholders to secure funding. It communicates to the stakeholders how much funding will be required for a given project and how allocations will be made based on tasks, activities, milestones, and phases.

After the budget of a project has been approved, it becomes a vital tool for monitoring and controlling expenditure. As a project manager, you can use it as a basis for determining if the actual costs are within the allocated funds (constraints). If well implemented, there should be marginal discrepancies between actual and estimated costs. You need to have a project budget in place to ensure that stakeholders get a return on investment for money injected into a project.

Importance of Project Budget Planning

In order to complete a particular project, there are certain costs, which are associated with it, for example, hiring the right project team, the vendors, and much more. It is vital to provide an estimation of the relevant costs in order to know the overall value of output. It is important to consider some costs such as the cost of labor, raw material, travel, consultants, and some costs depend on projects like office equipment, telephone charges, office space, and much more.

  • A project budget template would assist in inserting the relevant information in a systematic manner.
  • There would be no need to do the tiring calculation anymore as it is likely that all the calculation would be automatic.
  • Sometimes it is important to include minor information as well, which depicts the value of the cents as well.
  • The project budget template is likely to give information on the variable expenses and the fixed expenses so it is easier to find valuable information with a single glance.
  • It is possible to do a comparison between the estimated budget and the actual budget. Finding the difference between the two would always be interesting.

Other Tools

Technological advancement is bringing numerous changes in the life of individuals belonging to the age of modernization. There are tools like software available for project management, which can assist in making the process simplified. There are even options of a free trial in order to get an idea about the services of a certain tools.

Things to Consider Before You Start Planning the Budget

When planning a project budget, you have to be thorough and must take into account all the cost sources to ensure the available funding is sufficient for the completion of the entire project.

Below are various factors to take into consideration before creating your budget:

Create a checklist

Prepare a list of questions that give insight into the project requirements. Project requirements will often dictate the costs of a project. Examples of questions to include in the checklist are:

  • What are the project objectives?
  • Which tasks and activities are required at every step of the project?
  • Do I have a list of deliverables at every stage of the project?
  • Do I have the option to lease or buy equipment? Which equipment and which option is cheaper?
  • Are there similar projects that have been completed recently? What was their budget?
  • What assumptions should I make? How do they affect the budget?
  • How many teams are required for different tasks?
  • Am I required to apply for licenses and permits? How much do they cost?
  • Is there a need for hiring specialists or experts? Which tasks need specialists?

Group the project cost into categories

You should categorize identified budget costs into categories that represent costs that fall within the same domains of the project. Categories can be personalized based on the type of project in question. Categorizing costs helps in simplifying the interpretation and mapping out of the project budget. 

Use historical data

Always review other similar projects’ budgets. Similar in that they had the same specific objective or used the exact approach to address a problem. Identify shortcomings and successes and learn from them. Historical data can be essential in creating a starting point or blueprint for the budget.

 Reach out to your mentors and experts

Experience is a huge contributor to preparing an effective project budget. It is therefore advisable to consult mentors and experts in project management. Consultations can be made to find pitfalls to avoid and determine the accuracy of the budget.

Budget contingency

An efficient project budget has to consider the unknown – unprecedented events/costs. Examples of unexpected events are delays, defaults, equipment breakdown, harsh weather, etc. You should therefore include a contingency budget to cover costs associated with unprecedented events. Estimation of a contingency budget can be difficult. It is advisable to consult experts, but the general rule is to set aside 10% of the budget as a contingency.

Budget monitoring

As the project manager, you need to devise plans to monitor the budget. This may include setting monitoring intervals and identifying metrics of measurement of expenses. Budget monitoring is essential for identifying when costs exceed estimates, and additional funds are required. This way, the project is able to progress within budget limits, and delays are avoided.

Plan how to document the budget

Once all the different portions of a project budget have been identified, you should plan how to document this information. The budget can be paper-based, electronic, or both. Convenience is important to be considered when determining the method of preparing it.

Making a Project Budget Template

Creating an accurate project budget is a daunting but achievable process for you as a project manager. A budget cuts across all aspects of a project, and if not done correctly, it may hinder the completion of deliverables.

The steps given below can be used to guide you in creating effective project budgets:

Identify project scope

Scope identification is the first step of budgeting a project. You should identify all the project requirements and deliverables. The project scope will define the deliverables, tasks, milestones, associated timelines, human resources needed, legal and regulatory guidelines, etc. You can use a WBS (work breakdown structure) to define and list the project scope. 

Identify all the resources and materials

Once the scope has been well defined, the project budget should document all the resources and materials (costs) needed to execute the project. These costs can be categorized depending on the utility of the associated task, milestone, or activity.

Below are common categories of costs in a project budget:

 Direct costs

Direct costs are associated with resources and materials directly used to obtain project deliverables. Direct costs will typically be used to buy consumables such as raw materials, labour, equipment, hardware, software/application, etc. They will typically be paid at the beginning of the project, task, or milestones.

Indirect costs

Indirect costs are expenditures that are not directly used in obtaining consumables. Indirect costs are often the basic costs of doing business and cannot be directly linked to a consumable or activity. Examples of indirect costs are funds used for administrative salaries, training, professional services such as consultants, research expenses, taxes, rent, temporary workers, advertising, utilities, etc.

Capital costs

Capital costs are expenses the project or company tends to benefit from over several years. Capital can be defined as already-produced durable goods available for use as factors of production for continued use throughout the project. Examples of capital resources are land, equipment, office buildings, etc. Capital costs often result in the acquisition of assets.

Operating costs

Operating costs are ongoing costs utilized in the daily operations of a project before, during, and after its completion. Some indirect costs can fall under operating expenses if they are recurring. Examples of operating resources and materials include administrative staff, maintenance costs, training, licensing, full-time workers’ salary rates, etc.

Project deliverable costs

The project budget also needs to indicate the costs associated with each deliverable. Identify all the deliverables in the WBS and identify all their requirements. The budget should also indicate the deliverables that come at no financial cost; as not all deliverables have to cost money. 

Project management costs

Management of a project typically requires several people, depending on the scale of the project. Large projects require a larger management team than small-scale projects do. The project budget must therefore indicate the breakdown and sum of management costs. Examples of project management costs include costs of setting up an office, office supplies, salaries of the management (if it is being outsourced), etc.

Assign amounts

After identifying all the resources and materials required at every stage of the project, you should then calculate the estimated/projected costs of these resources and materials. The project budget should use a consistent monetary unit when stating costs. Also, estimation of costs will often require consulting experts, reviewing historical budgets, and extensive research. When estimating costs that vary due based on factors such as time, for example, salary rates, try to use averages and industry standards. 

Add contingency and taxes

The next step is adding contingency and taxes categories to the budget. While it may seem unnecessary sometimes to include a contingency budget, it is highly recommended. Taking tax into consideration is always a good practice for you as a project manager. Including a tax category helps when the company will be filing for taxes, as they can declare how much tax they paid for the project.

Build your budget

Now that all the components of the project budget have been identified and defined, it is time to compile all the information in a single document that should be presented to the stakeholders. You can choose to use a spreadsheet or a budgeting application to create the budget. Ensure there are columns that indicate the tasks and costs. Also, make sure the tasks are correctly categorized and the total of each category and the budget are given. Any notes and assumptions can also be included in the budget.

Get approval and implement

The project budget should then be presented to the appropriate party. If it is satisfactory, they should sign it as its approval. If the manager or stakeholders request/instruct to make any changes, make them until an acceptable budget has been prepared. However, if you believe in and can justify the budget you presented, you should not hesitate to defend the highlighted factors even if the manager is asking for changes to be made.

Track spending

Once the budget is approved, it can be implemented. You should record all the expenses to make it easier to monitor expenditure.

Tip: Project budget management will typically involve comparing the actual costs against projected costs. This is a huge factor in how valuable the budget will be to the project.

Baseline and re-baseline the budget

Lastly, use the project budget as the baseline of the project’s progress. Keep track of the project tasks that have been completed by checking which expenses have been incurred in the budget. If any changes/modifications are made to the project, re-baseline the budget by including them in the budget. This may require approval from the stakeholders in most cases.

Free Budget Templates

As a project manager, you can create a budget for your projects with the help of templates. Templates have blank sections for the fundamental components of a project budget that can be filled with the specifics of the projected costs of the project. You can download such professionally prepared templates from this website at no charge. In addition, the templates are easily customizable to add or remove any sections that may or may not be necessary for the project at hand.

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      5 Ways to Improve Project Budget Estimation Process and Accuracy

      As mentioned earlier, budget estimation is often an intimidating task for most project managers. This is especially relevant in case of large and complex projects. Below are different project budget management estimation techniques that are commonly used:

      Bottom-up estimation

      A bottom-up estimation technique requires you to break down the project into the smallest components of tasks, milestones, or phases and then estimate the costs of the identified components. The estimates are then added to determine the total sum of the estimated cost. This technique often requires involving employees from different departments to outline the necessary tasks and steps required to complete their respective domains of the project. The main disadvantage of a bottom-up estimation approach is that it is difficult to identify all the tasks that ought to be done within the project. Therefore, many changes have to be made to the project once it starts, leading to budget bloat.

      Top-down estimation

      Top-down estimation begins with a total estimation of the project budget and allocates it to the different project components/tasks. The estimated figure can be based on similar projects’ budgets or current economic conditions. Top-down estimations are disadvantageous, especially for new projects whose scope is undefined. It is significantly difficult to estimate the cost of a budget if the scope is unknown. However, this technique is preferred when there is a fixed budget.  

      Analogous estimation

      Analogous estimation involves projecting the costs of a project based on the cost of other similar completed projects. This approach can have a significant degree of accuracy if the projects are similar to a great extent. However, its accuracy is unmatched compared to bottom-up estimation.

      Parametric estimation

      Parametric estimation is an approach that bases the costs of a project on specific criteria (parameters) of performance and execution of tasks. It breaks down tasks into these parameters and uses industry rates or data points to estimate the costs of those tasks. Examples of parameters include man-hours and the number of workers required to complete a task. The parametric estimation method is more accurate than analogous estimation and also more involving, especially for digital projects.

      Three-point estimation

      A three-point estimation method involves estimating three project budget figures – best and worst-case scenario costs and the most likely cost. With a three-point project budget, you can mitigate risks associated with the project. A three-point estimation method is the most efficient technique as it produces a realistic and rational project budget estimate.

      Project Budget Example

      An example of a project budget is given below:

      Company XYZ Fundraiser

      Task

      Labour time

      Quantity

      Cost ($)

       

      Estimated

      Actual

       

      Estimated

      Actual

      Venue hire

      2 days

      2 days

       

      500

      500

      Equipment hire

      2 days

      2 days

       

      250

      200

      Facilitation

      10 hrs

      10 hrs

      5 speakers

      2500

      2500

      Catering

       

       

       

      500

      600

      Advertising costs

       

       

       

      800

      800

      Permits

       

       

       

      50

      50

      Contingency

       

       

       

      300

      0

       

       

       

       

      5300

      4650

      Above is a simple example of a project budget for Company XYZ. The company intends to hold a fundraiser which requires them to host a two-day event for their guests. The project manager was tasked to create a project budget for the event as indicated.

      Step 1

      The first primary task is to hire a venue. The venue available charges $250 per day, and the event is set to take place in two days. The total venue costs are then estimated to be $500. The company also has to hire sound system equipment and other communication gadgets, which are being leased for $125 per day, which amounts to $250 for the entire period. Over the course of the two-day event, there will be five guest speakers who are expected to address the audience for an accumulated period of 10 hours over the two days. The speakers charge $250 per hour combined (each speaker with their own rate). This amounts to $2500 for facilitation.

      Other costs to be incurred are advertising costs, permit fees, and the project manager has set aside a contingency budget of $300. This amounts to an estimated project budget of $5300.

      Step 2

      After the event, the project manager reviews their total expenditure and discovers the estimates matched the actual expenses in all categories except for equipment hire and catering. They hired equipment at $200 against the estimated $250. In addition, they spent $100 more on catering than projected and did not use the contingency amount. This amounted to a total expenditure of $4650. This indicates that the fundraising project cost below the budget by $650.

      Key Takeaways

      Budgeting is an important factor for making certain a project is valuable to its stakeholders. This is because a project budget outlines the available resources and how they are expected to be utilized during the execution of a project. As the project manager, therefore, you can use the budget to ensure expenditure remains within the project budget constraints. A standard budget outlines direct, indirect, capital, operating, project deliverable and management costs, contingency budget, and tax expenses. Project budgets can be created using spreadsheets, budgeting applications, or templates. Once created, you can then manage the budget by comparing actual costs and projected costs and making adjustments where necessary.

      Final Words

      Make use of the project planning budget worksheet templates and download them for free. Find out the information about the associated costs whether it is in cents or hundreds and even thousands of dollars and insert the relevant information in the worksheet template. The best part about some of the templates is that these are customizable so a person can change the information accordingly. Therefore, it is necessary to have some sort of basic information, which can guide a person. There are also numerous tutorials available online, which can help in learning tons of viable information for the success of the projects.