Managing a project involves more than just keeping track of tasks and deadlines—it requires diligent financial oversight to ensure that you stay within budget and achieve your financial goals. One of the most effective ways to maintain this oversight is by entering Budgeted Revenue, Budgeted Cost, and Percent Complete into your project management system. Here’s why these metrics are crucial for your project’s financial health.
Accurate Financial Projections
By providing the Budgeted Revenue and Budgeted Cost figures, you’re equipping your project management system with the essential data needed to generate accurate financial projections. These projections appear on the right-hand side of the project details page and are also featured in various reports. They offer a snapshot of where your project stands financially and help forecast future financial performance.
Track Progress and Stay on Budget
The Percent Complete metric gives a clear picture of how much work has been completed relative to the total project scope. When combined with your budgeted figures, this percentage helps the system assess whether you are on track with your financial goals. It plays a vital role in comparing the planned budget against the actual progress and expenditures, thereby preventing unexpected budget overruns.
Enhanced Cost Management
If you’ve assigned a Total Hourly Rate to each employee involved in the project, the system will utilise this information to calculate the cost-to-date and project the total cost of the project. This feature is particularly valuable as it provides a real-time view of labour costs and helps in managing these expenses efficiently. By monitoring these calculations, you can better manage your budget and avoid overspending on labour.
Improved Financial Decision-Making
Having access to detailed financial projections and real-time cost tracking empowers you to make informed decisions. Whether it’s reallocating resources, adjusting project scopes, or negotiating changes with stakeholders, the insights provided by these metrics support more strategic and data-driven decision-making.
Conclusion
Entering Budgeted Revenue, Budgeted Cost and Percent Complete into your project management system is more than just a procedural step; it’s a critical practice for effective financial oversight and management. By doing so, you gain a comprehensive view of your project’s financial health, enabling you to stay on track, manage costs proactively, and make informed decisions that contribute to the overall success of your project.
