Basic accounting is one of the key skills that project managers need to master to keep their projects within budget.
At a high-level, you need to forecast your monthly, quarterly, yearly and overall project expenditures. Obviously, you need to compare your planned versus actual numbers which should be done at least monthly. Report any variations and make the necessary adjustments as appropriate.
Depending on your project, you may also need to calculate the costs for internal employees. Usually, it is a fixed monthly amount regardless of the position which is then multiplied based on staff utilization. If you are using contractors, get their rates and do not forget to include taxes.
There are other expenses to consider as well such as capital expenditures, fixed rate resources, hardware costs, software costs, equipment leases, one-time expenses, ongoing costs and R&D credits.
Connect with Dr. John A. Estrella via Facebook, LinkedIn and Twitter.
Tags: accounting, budget