What Are The Key Elements of Project Budgets?
There are almost countless different ways to approach the development of a project budget. Typical elements depend on the specific needs of a given project, but the following can be found in the majority of project budget templates:
Think details such as project name, project scope, current date, project manager, project sponsor, key stakeholders, and project team members.
Project tasks, stages & milestones
The project schedule is arguably one of the most difficult parts of a project to put together and is essential when it comes to making accurate estimates. Basically, your project needs to be broken down into tasks so that you and your team can accurately assess how much money each task will cost you. You may also need to include sub-tasks.
Also known as line items, the most commonly seen are labor costs and material costs. Labor and materials costs come up in nearly every project in the world and are often the most expensive. Other line items depend on your project's variables, for example, travel costs.
Estimated costs vs. actual costs
This allows your team to assess the accuracy of your budget estimate and will help you budget for similar projects in the future.
Project expenses vs. project income
This section isn't always included, but it can be very useful if your project is already generating or receiving some form of income.
One-time vs. recurring expenses
Once again, this depends on the nature of your project. However, it can be useful to differentiate between one-time expenses (for example, buying materials) and recurring expenses (for example, contracting monthly services from a marketing agency).
Common project budget cost categories
Depending on the nature of your project, there are so many different budget items and costs that you might need to take into account. Here are some of the most common (and significant) project costs:
Also known as human resources costs, this refers to all the fees associated with employees. It also includes temporary workers and freelancers working on your project.
All the material items that are needed to bring your project to life.
If your project involves travel, this encompasses all associated costs. This extends to modes of transportation, lodgings, meals, event fees, and the like.
Training & professional development
Any specialized training, research, or study that might be required by team members to carry out your project.
Different than human resources costs, this category applies to specialized services contracted externally such as legal counsel, financial consultants, marketing agencies, design studios, and so on.
Equipment & technology
Closely related to material costs, this category applies if you need to make any significant changes, upgrades, or developments to your equipment and technology to complete your project.
It's always a good idea to add a little extra. Most project teams add 5-15% to their finished budget in order to account for any oversights and ensure that the total budget covers all the project activities.
Noteworthy indirect costs
This accounts for costs that are not directly related to a project, but that has a connection to it nevertheless. Indirect costs should only be indicated in your project budget if they're significant. Using more pens and pencils while working on project work? Probably not significant. Paying higher salaries due to overtime hours? Significant.
Our Free Project Budget Template
As you can see, there are a lot of elements that go into an effective project budget template. Instead of having to worry about developing your own template on Excel or another project management software, why not try out our free project budget template below?
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