Chapter 11. Setting Up a Project Budget

Projects cost money. Whether you’re planning a small department retreat at the end of next month or building the next space station for a 2020 launch, the project budget will be a key factor in all the planning and tracking decisions you make.

The budget is a controlling benchmark—a line in the sand beyond which project costs should not overstep. Initially, the cost of a project is based on your forecasted costs for scheduled tasks and their assigned resources. Once the project begins and you start tracking progress on tasks, Project adjusts these forecasts to reflect actual work and actual costs. One of your jobs as project manager is to make sure project costs don’t exceed your allocated budget.

This chapter starts with a brief introduction to some methods that organizations use to develop project budgets. You’ll focus on setting up your project schedule so Project calculates costs appropriately—for example, identifying resource costs as well as any additional costs associated with tasks. Along the way, you’ll learn how to use cost resources in addition to work and material resources.

This chapter also explains how to look at project costs from different points of view, depending on the level of detail you want. You’ll learn how to compare project costs against your budget using the budget resource feature. If Project gives you bad (but realistic) news that costs are outrunning the budget, this chapter provides specific cost-cutting measures ...

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