What is a project budget template?
When managing projects, one of the main tasks before beginning will be creating a project budget. A project budget is a document that outlines all expenses related to your potential project. This will estimate and summarize all costs required to complete your project.
Using a project budget template can decrease the time and effort to plan a budget, and helps to standardize the overall planning process. A Project Budget Template is a detailed planning tool that uses previous projects - or a standard framework - to estimate a new project’s revenues, expenses and profit. Using a template can save you valuable time in the creation of new projects.
This budget serves as a document to outline all expected costs for the various stages of the project, including:
- Staffing
- Project tools
- Expenses
- Hours worked/Labor
- Software
- Travel
- Meals
- And more
Using a project budget template, you can reuse the structure and content of past projects, including general tasks and common budgeted costs. A template ensures that you are not missing any vital pieces of information that could lead to an inaccurate budget.
Why do you need a project budget template?
Writing a great project proposal can be a daunting task. You are reviewing all potential costs of tasks and milestones that need to be completed over a defined period of time. You will use this to forecast and define the resources your team will require for each project phase.
Planning a project budget helps you stay ahead of the curve. It allows you to identify how much your process will likely cost, and gives your project team the ability to ensure they are not exceeding the budget. A project budget template is a great tool to make sure your potential cost is within the approved funding for the project.
Creating a Project Budget
For budget creation, there are a variety of options you can pick from to get started. Choices range from classic spreadsheet options like Excel, all the way up to cloud based CRMs like Bonsai and Asana. When getting started, make sure you choose a tool that allows you to keep track of current and future expenses.
Why platforms like Excel are poor project budgeting tools
One of the biggest issues with using spreadsheet tools for project management is that they lack many core features that are needed to successfully track and manage projects. While a tool like Excel is not necessarily bad for data analysis or financial forecasting, it may not be the best available option for creating a budget template.
Excel is so manual that you will waste a lot of time and increase your risk of error. Consider the following drawbacks:
- Excel lacks the project tracking features that make it easy to manage your resources and their time
- There is no way of tracking risks or milestones in an Excel sheet, and also no way to link actions with issues
- You cannot collaborate effectively in real-time with team members
- You cannot automate processes for multiple projects without paying extra for business intelligence integrations
Using business automation for your project budget
Project management includes many manual, repetitive processes. A best practice for creating your project budget is to introduce business automation. This can save your business time and money.
Automation, such as planning, reporting, or updating, can often be repeated or adapted to different projects within an organization since they usually share a business goal. You can evaluate your Customer Relationship Management (CRM) tool and sales pipeline with automation tools, and then use these features to examine how different projects can affect your budget.
Today’s most popular CRM and sales tools feature automation and business intelligence. Platforms like Bonsai allow you to set up automations for milestones such as forms being completed, when a contract is signed, and when a project is completed. You can even use your CRM to automate payments and use data to model future budget and business decisions.
Automating processes creates a clear structure, a sense of routine, and establishes accountability throughout your team.
Step by step how to create a project budget
When creating a project budget, consider using the following framework as a guideline to get started:
- Define Project Scope
- Project scope is a detailed outline of all aspects of a project: phases, resources, timelines, budget, and more. Project scope involves determining and documenting a list of specifics such as project goals, deliverables, tasks, costs and deadlines. In short, a project scope defines all the work and considerations required to deliver a specific outcome. The scope statement explains the boundaries of the project, establishes responsibilities for each team member and sets up procedures for how completed work will be verified and approved.
- Identify What Resources Are Needed
- When identifying all the resources and materials you’ll need to perform well, make sure to include them into your estimate when calculating the price. You will need to budget for resources when you want to track planned (baseline) work, material, or costs against actual work, material, or costs.
- Estimation Of All Product Costs
- To create an effective budget, you must account for everything that will incur a cost. Consider the following expenses for reference:
- Labor
- Equipment
- Supplies
- Travel
- Training
- Overhead
- etc.
- Cost Allocation
- Part of maintaining an effective budget is making sure you determine which part of the budget each business unit is responsible for. This is known as cost allocation, and it helps determine which branch of the business is responsible for each cost.
- Monitoring & Controlling Your Budget
- A good project budget should be detailed and include information about the amount of money you expect to earn from the project, when those earnings will be received, and what the project’s profit margins will be. Project budgets are often used to determine whether a proposed project is worth pursuing. This can be done by comparing the estimated budget of the project to the expected profit. You will need to monitor, control, and potentially even adjust your budget as the project proceeds.
Managing your budget effectively
Business budget templates give you a way to measure your budget in a more concrete way than an excel template. You are not only able to provide more detail about each line item, but also able to present the budget in a way that is easy to read and understand.
A budget template allows you to allocate and plan for each dollar. You prepare for spending and plan for flexibility if needed. Following a budget template also allows you to adjust and prepare for potential scenarios that may arise throughout the project.
Create your own consulting project budget with Bonsai templates
Managing a budget is an essential part of running a successful freelance business. You must account for income and expenses, monitor how well your business is performing, and plan for the future. Using a project budget template can decrease the time and effort to plan a budget, and will help standardize the overall planning process.
Using an effective template can make the difference between a rejected project and an approved one. You may have the best idea ever - but if you cannot keep an eye on the details and make sure you cover all grounds - you may not be able to put your plan into action.
A vital part of project management is creating and managing an accurate budget. Use Bonsai’s project budget template, along with a well-defined project plan, to put together a winning budget today!
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