Smart planning, communication, and delegation put the budget on track – and keep it there.
For most project managers and cost administrators in corporate departments, financial project management is an everyday occurrence. Dealing with business dollars is simply part of the routine for team members who work with vendors, undergo product development, and engage in any sales activity as a part of their department activity.
But that doesn’t mean financial project management is a walk in the park. Whether your company is a Fortune 500 or a small startup, abiding by budget restrictions in order to meet company goals can easily be a difficult mandate to keep, even if your intentions are good.
Financial projects can easily grow beyond their scope
No one necessarily sets out to waste company resources, but it happens. Projects can easily surpass their original breadth and depth when close attention is not paid to their progression. Although finances can create tight restrictions for a project manager, often poor planning or wasted resources suddenly causes a project to exceed the parameters established for it. Unless you plan up front for unexpected costs, projects can easily miss the target and fail to meet expectations.
Planning, preparation, and teamwork are key
Smooth, successful projects that stay focused on project goals, define the scope and budget and don’t rock the boat with worrisome extra costs or lack of organization will help the organization meet its bottom line – and keep the overall budget in line. When preparing for project management on the financial side, pay attention to these tips for before, during, and after the project in order to ensure the best possible outcome for your company.
Before the project begins
- Provide education for your team and workforce. A department that is up-to-date in budget management and best financial practices will be more adept at handling large projects with ease. Ongoing education in the budget and financial realm ensures that you’re less likely to begin a project with uninformed people at the helm.
- Establish the goals and benefits of the project. A clear definition of the project’s goals and expected benefits will ground your team in a common goal and help guide the budget’s development. Knowing what the main goals and benefits are should determine where resources land, the largest budget categories, and the areas to cut back.
- Determine all possible costs and expenses. Inevitably, extra costs arise in every project. A good practice to deal with this is to allocate resources for the “extras” that may come up, or for areas that may end up going over budget, especially if predicting final amounts is difficult.
- Assign budget categories to relevant team members. Although you as the budget manager are the one to oversee the entire financial project, there are often people in charge of certain aspects, endeavors, or categories of the project. Letting them oversee their own portion of the budget spreads out responsibility and ensures that the people who are dealing with a certain area report on the finances for it.
During the project
- Invest in good financial project management software. Software that allows for easy team collaboration, planning, frequent updating, re-forecasting, and reporting will make the project management a hundred times easier. Rather than tracking spreadsheets separately, having a central budget software for everyone to access will ensure accuracy and better overall management.
- Continually revisit the budget and reforecast any areas that appear to be off. Re-planning throughout the project will help keep surprises to a minimum and allow for changes to be made that may affect the rest of the project’s completion – i.e. if one area turns out to require less resources than expected, more resources may be allocated for another stage of the project.
- Stick to the scope. Balancing budget adherence and budget re-planning can be a tricky business, but overall it’s important to stick to the general budget scope as defined by the goals and benefits originally established.
- Ensure that individuals manage their portions of the budget, if applicable. Monitor and check in on people who are responsible for reporting their expenses as part of the overall financial project management.
- Plan for periodic reporting. Depending on the length of the project, plan for times when a formal or semi-formal report can be shared with anyone who needs updating, such as other departments, executives, or shareholders.
After project completion
- Ensure that benefits met expectations. This post-project step can be ignored if the project met its budget, but it’s important to gage whether or not the investment truly provided the benefits anticipated. Although staying on budget is extremely important, it is not the only measure of success, at least for most projects.
- Measure how closely you met your original goals. Did the project achieve what was expected? Reflection will ensure even better management next time and help the department in tracking the year’s progress.
For any team that wants to successfully plan and track projects in the financial realm, smart initial planning, careful tracking and re-planning, and post-project reflection will most ideally ensure that the project can be praised as a success.