Adherence to the budget should be periodically checked in the implementation phase and any deviations from individual budgetary items (accounts) should be documented and explained.
It is best to check your financial progress at the time of each milestone that you have specified to divide the project into stages. This allows you to maintain an overview of the financial progress of the project and to take corrective action if necessary.
Accounting should be able to provide information concerning the current status at any time – in other words, even at milestones.
The time required for each measure and core project task should be estimated in advance. This makes it easier to select the most cost-effective potential measure in terms of personnel costs.
Comparison of cost and benefit
The personnel and financial costs of the various measures you implemented in the last project stage can be compared as a ratio to the benefits gained as a result. The ratio of expenditure (cost) to benefit indicates whether the chosen methods are effective - which hopefully confirms the evaluation - and efficient (economical).
Cost and benefit can only be compared if the working time required to implement the individual measures has been suitably documented.
- You did not link financial controlling with the project milestones. Therefore, project management does not take into account the cost and benefit of individual measures.
- You shy away from the cost of keeping timesheets or dread the resulting transparency.
If you compare the personnel and financial costs with benefits – in particular the effectiveness of measures – you can better manage your project and make sure the available funds are used efficiently to reach the project’s objectives. A timesheet allows you to check the appropriateness of your estimation of personnel costs for individual measures (time budget).
Periodically compare income and expenditure with your budget. Modern accounting programs often allow you to automatically calculate deviations from the budget.
Continuously record the time that you and your team members spend on the various tasks involved with planning, executing and evaluating your project. This will give you an ideal basis for realistically estimating personnel and time costs in your next project.
- Do you check regularly that you are within your budget?
- Do you keep a detailed check on the time spent for each task?
- Can you justify deviations from the budget?
- Do you give any thought to the cost and benefit aspect when planning and readjusting your procedures?