A project budget plan is a document that provides an estimate of funds required to perform each activity of the project. It’s important to make an estimation of the project budget in the early stages even before starting the planning phase.
Project budget estimation is presented to investors along with some other financial analyses to check the economical practicality of the project.
The project budget plan template in excel is a document that is considered an essential part of the project feasibility study report. The accuracy and precision of the estimate get more intention from investors.
Investors like to see a ballpark estimate of the budget in the initial reporting of the project outline plan along with ROI, net present value, CBA (cost benefit analysis), and project payback period.
Project budget estimation covers budget allocation over the whole WBS of projects. A budget-rich project is relatively easier to manage and more likely to attract better skills and human resources to perform tasks.
A ballpark estimate of the project budget can be calculated from project management software as well after the initial phase of defining WBS and resource capacity planning. Still, the project budget plan in excel is better at initial estimations of the project budget with fewer efforts.
Project Budget Plan
Project budgeting is the part of core planning that defines how much investment, resources, market shares, and capital we have. In this phase of project planning we set a specific amount for different tasks i.e; labor cost, project expenses (machinery, material resources, human resources, transportation, employee salaries, etc), our purchasing, buying of any kind of services, or outsourcing. The contingency plan amount is also part of the budget.
There are many project estimation methods. But the most common and widely used ones are; ballpark or rough order of magnitude estimate, project cost tracking, budget estimate, and statement of work estimate.
A few other estimation techniques are; three-point estimate, bottom-up and top-down estimate, and parametric estimate.
How do I Create a Project Budget in Excel?
The project budget plan template’s importance is clearly stated in the above section. Now, it’s important to understand the exact steps to create a simple project budget plan template using an excel spreadsheet;
- Define the work breakdown structure and list of tasks.
- Divide the tasks into breakable sub-activities for the allocation of resources individually.
- Assign the resources to each sub-activity of WBS with an estimation of the total labor hours required to perform the activity on a timely basis.
- Based on the salary structure of labor, calculate the total labor cost of each activity and overall project.
- Similarly, calculate the material requirement, unit cost of material, and total material cost for each activity and overall project.
- Include other costs in the project budget plan estimation as well such as the cost of project management team salaries, and other miscellaneous costs.
Moreover, to the above content. It’s important to understand the few guidelines to approach making the project budget plan template.
Identification of project goals and deliverables, doing proper research, conducting 7W’s questioning technique, risk management, ballpark estimate, and hidden costs, checklist, refining budget estimation, and creating a statement of work are the easiest steps to approach for an effective budget plan creation.
Usually, project budgets consist of financial details.
As well as estimates of money according to requirement and layout. For successful projects from the beginning to resources of material, the budget is very necessary for every project to make and monitor all expenses.
It will let you know when you are exceeding your budget. Be careful and monitor your entire budget. These templates for the budget usually come in handy.
Project Budget Plan in Excel Format
As we know that each project documentation has its own type of specifications, elements, facts, and figures. The layout and format also differ from each other. So, here are some elements that must be included in this template;
- Employee Benefits: This includes employees’ salaries, wages, hardship, transportation, etc.
- Agreement of Services: In this section, we mention any service, resource (material or human resource), or management tool that we are outsourcing, purchasing, or hiring for a specific time.
- Material/Machinery/Supplier: Here we mention expenses related to project execution i.e; stationery, office rent, space, service outside the company, material, machine, types of equipment, maintenance and repair, etc.
- Transportation Expenses: Any kind of expense related to transportation must be mentioned here in this section. This transportation includes material for employees and items for machinery.
- Overhead Expenses: It’s highly recommended practice to set a budget for indirect expenses to run a project smoothly.