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Home > Departments > Methods & Means
If you’ve been fortunate enough to rely on a contingency fund when managing your project budgets in the past, your luck has probably run out by now. Everyone is tightening belts, and project managers need to find ways to tighten up their financial monitoring, too.
On a typical project, the numbers most relevant to project managers and sponsors are budget to date, actual to date and estimate to complete. If you don’t know what these numbers are, you’re already on track to a financial meltdown, so start talking to some folks in finance and work out what you’re spending. It isn’t difficult to track spending once you get started — setting up the templates and tracking spreadsheets is the hard part, and perhaps your project management office can help.
But budgeters beware: a common mistake is subtracting your actual to date from your total budget and using the result as your estimate to complete (ETC) figure. That’s just mathematics — it’s not a realistic view of the money needed to finish the work. The only way to reliably work out ETC is to cost out the tasks that are still left to do. This will give you a prediction of the amount of money required to finish the project, and is much more useful than working with the vague hope that the project will come in on budget.
The scary thing about knowing your ETC is that you’ll also then know whether the amount of money left in your budget is going to be enough to see you through to the end of your project.
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