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Integrating Top Down Budgeting and Cost Management with Microsoft Project

If you are an IT Project Manager, you’ve probably faced a moment where you’ve said something like this to yourself, “I’ve been appointed as the PM for this major project. It’s starting soon, but the preliminary budget was created many months ago. I have to do a more detailed budget now, and start the task planning in Microsoft Project for all the project activity.”

Does this scenario sound familiar to anyone? There are a few issues with being in this spot as a PM!

 

  1. The preliminary budget may have been done using a corporate financial structure, which has Capital/Expense, then Labor, Hardware, Software, T&E, Overheads, Contingency, etc., and that isn’t exactly how your project task schedule will be configured.
  2. If yours is like the majority of organizations, your company uses a fiscal month-based cost system (4-week/4-week/5-week fiscal months). Microsoft Project doesn’t support that, and you need to develop a more detailed budget with fiscal months for management approval.
  3. Microsoft Project’s cost functionality is “bottoms up” (based on resources assigned to tasks and the cost rates), and your budgeting and forecasting set up is basically “top down!”
  4. You may be wondering how to handle project costs which aren’t related to project tasks? There are such things as management costs, overheads, contingencies, etc., and it would be a lot of needless work to create dummy tasks only or use cost resources.
  5. You may not know how to get the project actual costs from your company’s accounting system.
  6. Finally, you are probably wondering how you will integrate Microsoft Project task costs based on schedule performance, while keeping in mind the requirement of producing a monthly forecast cost using your organization’s cost structure.

The good news is that my on-demand webinar addresses all of these issues. If you are a Project Manager in the IT field, of course, that is the focus, but the content we covered is useful to any Project Manager who needs to worry about budgeting or cost forecasting.

 

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1 Comment
  1. Hi. I was pleased to attend the webinar, it was very interesting and it will be useful to complement how we manage the annual budget allocated for the projects.

    One question: Is it recommended to integrate accounting or fiscal items into the total budget of the project so that it is more precise (for example: miscellaneous taxes, depreciations, etc.), or it is recommended to manage individual budgets (that is, budget of project flows, and independently budget of the project managed by Accounting)?

    Reply

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