课程: Project Management Foundations: Budgets

Verifying budget results

课程: Project Management Foundations: Budgets

Verifying budget results

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- I often review my checking account and the charges on my credit card to ensure things are as expected. Budget reporting is the equivalent of verifying your checking account, and it needs to be done frequently, but it's a disaster if your budget reporting is inaccurate. Here are items whose accuracy you should verify before finalizing your budget reports. Most project managers track charges by month. However, accounting months don't always line up with calendar months. Ensure your reporting is consistent tracking items over the same timeframe. Otherwise, your financial numbers could be inconsistent, which can cause your report's accuracy to be questioned. Verifying your purchases is critical. You might buy materials at different times than planned, or charges you didn't plan for, such as shipping, can create variances in your project reporting. So review the invoices for accuracy on all your project purchases. Check all costs allocated to your project. I've had more than one experience where costs were allocated to my project in error. Double check that the charges assigned to your project are valid and accurate. Question anything you didn't expect. Verify the accuracy and timing of contractor invoices. Ensure that the right people are being charged to your project, their hours are correct, and that the hourly rate is accurate. Also, note the timeframe for the invoice. I once had a contracting company that invoiced us every other week, and matching that up with monthly reports required data manipulation to ensure accuracy. So make sure you understand the timing of contractor invoices. Understand any overhead charges allocated to the project. Overhead costs for senior management time, facilities, utilities, and other general expenses are sometimes distributed to projects. This is appropriate if they're allocated fairly, but typical errors are made with overhead charges, so keep a look out. It's fair when overhead charges are added to the hourly rate in employee charges to your project. If this differs from how overhead expenses are distributed, question the formulas used to be sure they're appropriate. Also, management time can be double counted. Managers included in overheads might also bill time directly to your project. As a result, you're charged twice for management time. In the exercise files I've included a more comprehensive list of data items to verify for your budget reports. Check all these items and you'll ensure you don't overdraw your project's checking account.

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