How to create a project budget template (with definition)
By Indeed Editorial Team
Published 21 May 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
A project budget template is a useful tool that can help you to create an effective project budget. You can easily and quickly prepare a project budget with a template, which can save you both time and effort. Learning how to create and use this template can ease the project budgeting process and can allow you to create one with minimal errors. In this article, we look at what a project budget is, what a budget template for a project is, why it's important to have one, what to include, how to create one and a template example.
What is a project budget?
A project budget allows you to adequately prepare for a project by determining the total cost and preventing unnecessary spending. Within a project budget, you can include details of the project and its associated costs and, when the project progresses, you can adjust them. A project budget also encourages accountability because you can account for the allocation of resources and the amount of money spent at the end of the project.
What is a project budget template?
A project budget template is a pre-planned document or style guide that you can use to outline the financial details of your project. It contains a format that calculates the estimated total cost of the project. You can customise your template to indicate whenever the project is about to exceed its budget. For instance, when creating the template on a spreadsheet software program, you can set the formatting so that the figures turn to a different colour once the costs have exceeded the available budget.
Applying customisations such as this can be a useful way of quickly determining how well a project is progressing. In addition, you can also set your template up so that it automatically plots a graph when you enter figures. This can also help with analysis and is particularly valuable for when you share the project's progress with team members and stakeholders.
Why is it important to have a budget template for a project?
To finish a project successfully, you need money to complete the various tasks included in the project. These tasks can involve hiring a team, contracting vendors or hiring the necessary equipment to complete the project. Since these expenses are flexible, it's relatively easy to spend more than what you've estimated. But, if you have a template to plan your budget, you can easily make any adjustments to it when there are changes to the project's costs.
Having a project budget can give you a clear estimate of the project's costs. With a project budget, you can decide how to split the available funds throughout the project to ensure its success. For instance, you can determine whether the available funds for each part of the project are enough or if a reduction or increase in certain areas, such as consultant fees, labour costs or travel costs, is necessary. By using a template, you can simplify these processes and make it quicker and easier to develop an effective project budget.
What to include in a budget template
The content of your budget template largely depends on the type of project that you're working on. But there are some essential elements to include in most budget templates, such as:
costs that directly affect the project and are essential for getting the project started, such as equipment
optional costs that don't directly affect the project but can improve its progress, such as a tool that can improve the project's execution
the project's operating costs, which include labour costs, staff accommodation and transportation costs
the cost of managing the project, such as consultancy and supervisor fees
How to create a budget template for a project
Below, you can find a series of steps to follow that can help you to create a budget template for a project:
1. Identify the project's scope
When creating a budget template for a project, first identify the project's scope. To understand the extent of the project and its needs, consider breaking it down into smaller pieces. This way, you can group them according to their importance. Once you know how vital each group is, you can then list the resources under each group in order of importance.
For instance, you could create groups like equipment, marketing, training and miscellaneous. After doing this, you may decide that equipment and marketing are more important than training and miscellaneous.
2. Determine what resources you need
After identifying the scope of the project, determine what resources you need. To complete this next step, break down the resources in order of importance and list them under each group or category. To do this effectively, it's a good idea to consult other stakeholders so you don't miss any essential items. Once you have a comprehensive list of the resources, you can then allocate a budget to them in order of importance.
3. Assign costs to the resources
Next, assign costs to the resources that you require to implement the project. This is the essence of a budget template for a project and the goal is to be as effective as possible by removing unnecessary costs. First, review the list of resources and research their cost by comparing previous similar projects or any available prices. Next, determine the quantity or quality of the resources or services required to complete the project. To be efficient, begin by estimating the cost to get the project started. Once you revise your budget at a later date, you can then make adjustments.
4. Compare costs with your available funds
After assigning costs to your resources, the next step involves comparing them with your available funds. If the available funds are greater than the estimated costs, you can reserve the rest of the funds for emergencies. But, if the funds don't cover the project's costs, you can revise your resources and remove unnecessary items so that you can reallocate the project's funds.
5. Consider adding other details
Finally, to complete your budget template consider adding other details, such as the project title and description. The project title outlines the nature of the project in a single phase, whereas the description expands on this in a concise and informative way. You can also include sections like the contact details for the company, contractor and project manager.
Budget template for a project
You can create a budget template for a project by using a spreadsheet or word processing software program. Alternatively, you can create a template by using a project management tool. Here's a template that you could use to create a budget for a project:
[Here, you could include a brief description of the project, its mission and expected outcome.]
[Contractor telephone number/email address]
[Project manager name]
[Project manager address]
[Project manager telephone number/email address]
Contribution from current allocation:
Personnel salaries and benefits:
Contractual (administrative, excluding R&D contracts):
Total contribution from current allocation:
New funding requested:
Personnel salaries and benefits:
Contractual (administrative, excluding R&D contracts):
Total new funding:
Total intramural project cost:
Total extramural project cost:
This template divides into two sections. Each section is then divided into groups where the first group estimates the contributions from the current allocation and the second group estimates the intramural subtotal. While the first section provides the initial estimates, there's typically a need for more allocations or budgets as a project progresses. The second section, therefore, helps to estimate additional budget allocations.
This template also separates the two sections and calculates their subtotals individually. At the end of the template, you can calculate the final total by adding these figures together. You can add as many sections as needed to this template to include additional costs.
Other project management templates for project budgeting
You can also use some other project management templates to help keep your project within its budget constraints, including:
Timesheet template: This template helps track the amount of time that team members spend on their tasks. Browsing through timesheets from previous projects can give you an idea of the amount of time it takes to complete certain tasks, which can also help you to make budget estimates.
Work schedule template: For this type of template, you can list the team members and include information on the tasks you've assigned them, their specific responsibilities and where they're working. By doing this, you can increase accountability within the team, which can reduce the project's costs and improve productivity.
Risk tracking template: After identifying potential risks to a project, you can rank their priority, and as the project progresses, you can keep track of those that you and other team members have resolved.
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