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Project Management Tools for Budgeting

Project Management Tools for Budgeting

Project Management Tools for Budgeting

Budget forecasting tools are really important for small businesses especially when they’re just starting to grow. A budget is basically an estimate of how much income a business hopes to make and can also include an estimate of expenses a business expects. If you want your project to succeed, you need to make sure that it gets funded. It’s one of the most critical elements of your project but how can you do it? How do you ask people to fund your project and get them excited about supporting it?

Project Management Budgeting Tools

Project managers use budgeting tools and techniques to create financial data that ensure a project is funded adequately and can be completed within the allotted budget. Using models, templates and calculators, an effective project manager estimates accurately, monitors carefully and manages risk appropriately. These tools help the project manager effectively communicate the project budget status to the project sponsor, who typically provides the funding, throughout the project life cycle.

Standards

  1. The Project Management Institute publishes the “Project Management Body of Knowledge,” which defines how to calculate the budget at completion, budgeted cost of work performed and budgeted cost of work scheduled. These standard calculations help the project manager monitor project progress, stay within the budget and report the project’s status using universally recognized terms.

Analogous

  1. An analogous budget tool uses the actual costs of a previous project to estimate the cost of a new project. As long as the two projects are similar in nature, this technique works well. This approach can be used by less experienced project managers. However, using this technique to estimate the budget requirements for innovative and complex projects may be less accurate and unreliable.

Parametric

  1. A parametric budgeting tool uses historical data and other variables to calculate an estimate of project parameters, such as scope, cost and duration. For example, to calculate the cost estimate, multiply the planned hours of work by the historical cost per hour. Assuming that your historical data are relevant, this technique typically produces high levels of accuracy. Once you’ve figured out the estimated costs of activities required to complete your project, identify the risks associated with each one. By foreseeing possible overtime hours, price changes and extra charges, you can prepare a reasonable budget.

Top-Down Method

  1. Using a top-down budgeting tool, you look at the total project budget and estimate the costs for each process. By examining each activity needed to complete the project, you can then assess which activities to decrease, if needed, to meet the budget. This approach tends to discourage participatory-style management. The project manager takes all the responsibility for decision-making.

Bottom-Up Method

  1. Using a bottom-up budgeting approach, the project team brainstorms and discusses how to generate the project budget. The quality of the result depends on the quality of inputs. Getting expert advice during this process helps improve the accuracy of the budget. For example, run a meeting and invite past project managers. Use free project management budget software, such as SmartSheet, Project Budget Manager or AceProject, to draft and debate project expenses. Additionally, use the Project Evaluation and Review Technique, developed by the U.S. Navy, to analyze tasks and determine the critical tasks needed to complete the project.

Project Budget App

1. Cube

Our top pick for FP&A software is Cube, a strong and user-friendly FP&A application. Here is a brief description of Cube:

  1. The first spreadsheet-native FP&A software that helps finance plan for the unexpected and move the business forward.
  2. Eliminates manual work and provides the real-time insights finance needs to strategize with speed and agility. 
  3. Pairs the flexibility and familiarity of your spreadsheets with the control and power of enterprise software. 
  4. Implements quickly. Cube gets you up and running in days, not months, which means faster time to value at a lower cost.
  5. Connects with any source system, any browser, and any sheet in moments, so you don’t have to change how you work. 
  6. Access to an award-winning customer team with deep FP&A experience. 

2. Workday Adaptive Planning

Enterprise solutions for planning, modeling, budgeting, and forecasting for financial, labor, and sales needs are offered by Workday Adaptive Planning, formerly known as Adaptive Insights. Without the use of spreadsheets or outdated solutions, their technologies seek to foster collaboration across the organization.

For large businesses, Workday Adaptive Planning for Finance offers financial planning and analytics. They also add modeling, teamwork, analytics, management reporting, board reporting, scenario planning, and financial consolidation features to their FP&A system.

3. Anaplan

Complex scenario planning, intelligent forecasting, and quicker decision-making are all facilitated by Anaplan. Their corporate-wide solutions link strategy to results while also linking accountability to a single source of truth.

In order to integrate people, data, and plans across the organization and make the best decisions, Anaplan especially offers FP&A solutions. The solution consists of planning, budgeting, and forecasting, as well as specialist finance planning, operational planning, and planning for financial and operational planning, all of which promote better and quicker decision-making.

4. Planful

A cloud-based FP&A software platform from Planful delivers reporting, consolidation, and structured and dynamic planning. The Planful platform raises the financial dialogue and supports quicker, more certain, and more strategic decision-making.

Planful provides solutions for managing cash flow, employee reporting, financial reporting, annual operations planning, monthly close and consolidation, and multi-dimensional analysis for the finance industry. Early in 2020, the business changed its name from Host Analytics to better target mid-market clients.

5. Vena

Vena provides a comprehensive planning platform with ready-made solutions to automate time-consuming operations that connects people, processes, and systems. Financial planning and analysis, reporting, compliance reporting, and financial closing are examples of specific competencies. Vena provides FP&A software that is “pre-configured” for a prescriptive approach and can be altered to suit particular requirements.

6. Prophix

By automating routine processes, Prophix’s Corporate Performance Management (CPM) solution aims to increase profitability and reduce risk. With cloud or on-premise solution options, their technologies assist Finance in automatically budgeting, planning, consolidating, and reporting.

7. Jira

Jirav is a cloud-based financial planning and analysis tool that frees accounting and finance teams from the use of antiquated, error-prone spreadsheets for budgeting and forecasting. You can track, forecast, and share the data that matters most to your organization since it is totally configurable.

8. DataRails

Analytics is what DataRails does for the financial sector. Their financial analytics platform was created to give finance professionals the tools they need to easily gather, report, and analyze data. DataRails automates the data collection from each of your organizational systems and spreadsheets, resulting in the creation of a consolidated database of all your numbers without requiring you to alter the way you work.

9. Centage

With the help of Centage’s Planning Maestro, FP&A can make choices more swiftly and intelligently, respond to market changes rapidly, take prudent risks, and seize new possibilities. You may use the tool to create flexible, driver-based strategies, predict likely financial performance, monitor outcomes, and distribute vital information throughout the company.

10. OnPlan

With the help of the financial modeling software OnPlan, you can interact with your FP&A team to forecast, budget, and perform benchmarking with improved visibility and transparency. You provide OnPlan your current spreadsheet models, and they create a model just for you with useful dashboards, charts, graphs, and more.

What is Financial Forecasting?

Making financial projections in order to forecast and estimate your organization’s short- and long-term financial performance is known as financial forecasting. Organizations all across the world use forecasting as the cornerstone of finance and FP&A and as the basis for decision-making. FP&A often collaborates with the executive team and the rest of the company to acquire information, identify market trends and movements, and eventually produce predictions.

Forecasting in the past has frequently been based on past performance, present performance and trajectory, and projections of future market, competition, and internal performance, strategy, and execution. FP&A analyzes this data to forecast future cash flows, expenditures, revenues, profits, and other financial variables.

How are Financial Forecasts Used?

Forecasts are essential for internal financial modeling, financial planning, budgeting, hiring and personnel, capital expenditures, strategy development, and overall organizational execution.

The CEO, CFO, and other executives can decide to increase budgets in various areas of the company to take advantage of the predicted strong growth in earnings, for instance.

Business leaders might also prepare to depart or reduce investments in some markets or products if FP&A expects slow growth or contractions in certain areas.

The CEO and CFO also utilize financial forecasts externally to communicate with creditors and investors, create reports and projections, and determine broader financial criteria like company valuation, objectives, bonuses, and more.

Project Budget Forecasting Software

Workday Adaptive Planning 

best overall

A corporate performance management (CPM) product called Workday Adaptive Planning has forecasting and budgeting functions. Businesses in all market segments—Enterprise, mid-market, and small—love the Workday Business Planning Cloud.

Forecasting models supported by Workday include::

Those who are closest to the business can plan thanks to the purpose-built solutions provided by Workday software for finance. the whole collection of cloud-based software products supported by a strong in-memory technological platform that enables large-scale built-in analytics and functional and corporate-wide business planning.

Xero 

Best for small business

Xero is a popular small business online accounting solution because of how simple it is to use. Tools for financial reporting provide immediate, current reporting with direct links to all original transactions. You can also view cash flow in real-time, wherever you are, with online accounting.

At its core, Xero is a robust yet user-friendly accounting program created from the ground up. It is all you need to run your small business because it is written in straightforward language for users who are not familiar with accounting jargon.

Budget Maestro

Best for mid-market

For mid-market and even enterprise-level businesses wishing to handle budgeting and forecasting with reliability, Budget Maestro is the perfect answer. For the purpose of creating more accurate budgets and financial predictions, the program automates many of the labor-intensive and error-prone activities involved with using spreadsheets.

Budget Budget accuracy is continuously maintained by Maestro’s built-in financial intelligence and business rules, which are based on your assumptions and processes. Working with a centralized database eliminates the possibility of human error leading to data disparities. Additionally, any adjustments to estimates or hypotheses are immediately updated, ensuring that you are constantly working with the same version of the truth.

Prophix 

Best free to start

A free trial of PROPHIX’s budgeting and forecasting software is available, and it contains a central database, periodic forecasts (monthly, mid-year, multi-year), and other forecasting requirements that are all easily accessible. For proper analysis and management, this software provides income statements, balance sheets, cash flow, and other company-specific budgeting requirements to your desktop.

PROPHIX provides several options to increase forecasting precision. With PROPHIX’s versatile modeling capabilities, it is able to undertake what-if analyses, inter-period forecasts, actual to forecasts/budget comparisons, rolling forecast development, and forecasting based on numerous key performance metrics.

Budgyt 

Best for cloud

A budgeting and forecasting tool for any company, Budgyt is simple to use and intuitive. With this cloud-based solution, creating budgets is quicker, more precise, and more dependable thanks to an intuitive budgeting tool that takes the place of cumbersome spreadsheets. Clients in any industry with several stores, units, or divisions can use this service. Individual budgets are rolled up by Budgyt, which also produces reports and analyses. Additionally, Budgyt imports and exports data from the general ledger accounting software you now use.

Enterprise, mid-market, and small firms in the for-profit and non-profit sectors all favor this approach. If you are a for-profit organization or a non-profit, there are different price options.

Limelight

The financial planning and reporting software platform Limelight is simple to use and quick to set up. The web-based Limelight software enables collaboration, data integration, real-time planning, and reporting from any device.

Dynac CPM 

Imagine if your income statement and balance sheet are integrated, producing current cash flow statements whenever you require them. Add to that dynamic rolling predictions with “What if” scenarios so you can see the results of company choices.

Vivid Reports

is made to be an add-in for Microsoft Excel that is completely integrated with the general ledger accounts, balances, and transactions in your ERP. You can utilize all of Excel’s features, and it is quite simple to learn and use.

CALUMO

For accountants, CALUMO is a reporting, budgeting, and forecasting tool. Organizations can easily and rapidly report on, budget for, forecast, and plan their financial, sales, operational, manufacturing, and other initiatives with CALUMO.

Solver

The main factor influencing the expansion and profitability of your firm is quicker and better decision-making. Managers may readily get the data they need to examine business operations and financial data because it is all conveniently available in one package.

Budgeting Tools and Techniques used in Project Management

Most of the project management tools and techniques can be used in various fields, but there are techniques that are natively designed for specific activities and these activities or projects really can’t function properly if they don’t have the foundation of those tools.

Given below are some of the most noteworthy project management techniques that are commonly used in the industry right now.

1. Classic technique

We often think that completing a project or an assignment in our work-life requires the latest and the most complex tools and techniques so that we can achieve tangible results and for the most part is true but for all those other times the traditional and simplest techniques are the most appropriate for effective development in projects.

The classical technique in project management is an amazing procedure that includes a proper plan to cover all of the upcoming work activities, which tasks are to be performed, and what should be the chain of application that defines which task to do first, allocating proper resources to the tasks according to their importance, providing and receiving proper feedback from the team which helps in team building and also monitoring the quality of the work done and how are the deadlines being met by the team.

nTask has incorporated this technique in the app where you can create simple tasks for your teams and set actual and planned deadlines. You can also prioritize the tasks based on their urgency or dependencies.

Where to use: The Classical procedure is amazing for running projects that are performed by a team that is small in number because a larger team with a complex strategy isn’t required.

2. Waterfall technique

The waterfall technique is also considered a traditional project management tool because it builds on the upper mentioned Classical approach and takes it to a whole new level.

As the title suggests, the Waterfall technique is based on your project management tasks to be dealt with in a properly sequential form where the next task is only performed and performed well when the previous task has been completed. Just like a waterfall, the tasks flow to the desired direction smoothly but only if they are completed in a sequential form.

If you are working on a complex project with a lot of dependencies you can easily tackle the management of such kind of project using Gantt charts of nTask.

The projects are very properly monitored while using this technique and all the steps are accountable and are actually evaluated to confirm that the process is seamless and without any issues or worries. Gant charts are also used to clearly display a visual representation of all of the phases that the tasks go through and all of the dependencies involved in the project.

Where to use: The waterfall technique is an amazing technique that is used for complex projects that can not be dealt with by the classical approach. This is because of the fact that phasing is required in the development and if you really want to deliver a successful project then a properly rigid work structuring is required.

3. Agile Project Management

The project management technique that is the most famous and is quite outstanding in its application because it deals with projects in a way quite different from other traditional procedures is the Agile Project Management technique.

The Agile approach is basically crushing the big project steps into shorter sprints that help in a detailed analysis of the whole process during the development stage. This detailed analysis helps in effective and adaptive planning according to the needs and changes required in the project as it gains a proper shape.

All of these activities result in a solid continual improvement during the developmental stage, and also the teams become more organized and collaborative inclined to produce the best results possible.

The Agile frameworks commonly include different techniques such as Scrum, Kanban, FDD, and DSDM, etc.

Where to use: The Agile project management technique is used in projects whose development unravels in short but precise increments performed by small but highly collaborative teams.

As the Agile management procedure is so famous that, today, there are a lot of projects and work management software tools that will help you embed Scrum and Agile into your project and help you complete the development process with ease.

With Apps like nTask, you can configure different levels of your work structure which is quite convenient in tough situations, and also track long and short-term deadlines to keep your team on track. They can also show you the estimated work strategy for a specific project during the planning process and even create a Kanban board that effectively monitors all of the work progress your team has made so far.

Basically, what these software tools do is that allow you to envision your project being performed by the Agile method and visualize the structure so that you can achieve good results.

4. Rational Unified Process (RUP)

RUP is an amazing framework that was specially designed for the software market where the software development teams and the projects they work on, can benefit from this framework and achieve the best results possible.

Rational Unified Process prescribes implementing a sequential or iterative developmental process like the Waterfall technique, but with a slight change as the feedback which is collected for the betterment of the project in all future iterations and modifications, is taken from the direct product users.

Where to use: The RUP procedure is applied to software development projects where the whole process is broken down into pieces and also where the end-user input and satisfaction is a key factors of the project.

5. Program Evaluation and Review Technique

Program Evaluation and Review Technique (PERT) is an incredible software management technique that is very widely used in a lot of different areas and industries. The way this technique works is that it facilitates the project with quite complex and amazingly detailed planned scenarios that help the development team to properly visualize the whole process and their end results on PERT charts.

The main feature that this technique has is that it performs an effective analysis of the tasks that are performed within the project. That helps the team to keep track of all of their developmental activities and fix their weaknesses.

This technique was originally designed by the US Navy during the Cold War era which helped them to increase the efficiency of the work activities that were being performed in developing new technologies.

Where to use: Program Evaluation and Review Technique is best suited for those large and long-term projects where there a lot of non-routine tasks with ever-changing stakes. Also, the requirements for these projects can change according to the circumstances or a number of factors but PERT can handle them just fine.

6. Critical Path Technique

The Critical Path Technique is an amazing procedure that is used for projects and different tasks to schedule and plan the work activities, according to the requirements mentioned in the project brief. This technique is also in conjunction with the Program Evaluation and Review Technique method mentioned above.

This is an incredible technique that is used to detect and confirm the longest path for the tasks to be performed. This means that the activities that are supposed to happen on a certain trajectory have their critical importance highlighted so that the tasks can be individually performed and not in a sequential form.

This critical importance that technique finds out is helpful because then the development teams can control the project by playing head-on and complete the critical tasks first. This saves them precious time and they can complete the project with relative ease, once the more important work is out of the way.

Where to use: Critical Path Technique is more commonly used for very complex projects that have a lot of different tasks. And the development team has no idea what to complete first so that they can meet the deadlines and complete the project in a good time without wasting precious time and energy on doing everything at once, which generally results in them completing nothing. This procedure is generally used in areas like construction, software development, defense, and others.

7. Critical Chain Technique

Critical Chain Technique is an incredible derivation from the PERT and Critical Path Methodologies of project management. It has a more relaxed approach in terms of task orders and scheduling and suggests that there should be more flexibility while allocating resourcing to different tasks and more attention to analyze how the work time is being spent by the team on different project activities.

The CCT suggests that the work should be done on the basis of prioritization and also the dependencies relative to the project should be analyzed properly while the time spent on different activities should be optimized more carefully.

Where to use: Like the Program Evaluation and Review Technique and The Critical Path Technique, the Critical chain Technique is used in very complex projects. As it shines a more prominent light on how the team spends their time and revenue, it is best suited for projects where the resources are limited. 

8. Extreme Project Management (XPM)

Extreme Project Management technique has a more loose and optimistic approach when it comes to planning a project. It insists that the approach should be open and there should be a reduction of formalism in the company’s culture and the behavior of the management should not be stern and deterministic.

Where to use: XPM technique is commonly used in large projects where the complexity and uncertainty are high. This is because there are a large number of uncertain and unpredictable factors involved in the project that need to be addressed.

9. Kanban System

The Kanban System is the Agile methodology approach that helps to visualize the project management workflows from “Start” to “Done” status columns. It gives you the ability to map the workflow and put a limit to work in progress. Many people use notebooks, or display boards on the wall to move the cards along the work stages, but there are many useful Kanban Tools that can do this job more efficiently.

While using this technique of project management, you have full freedom to customize the name of the work stages that best fit your use case. Project management tools like nTask offer pre-built Kanban Board Templates that are easy to get started from users across any industry.

Another benefit of this methodology is that there is no need to have a scrum master to manage the work assigned, the whole project team is responsible to make timely deliveries.

Where to use: Kanban can be used for any project from small gigs to personal task lists, consultant bookings, to even large-scale software development projects. It is more useful to implement in any organization that has the less technical staff, so it is easy to adapt.

Project Management Tools

While the techniques are important, you also need specific tools that you can use to properly implement during the development page and achieve your desired results. Here is a list of tools that you can use during project management.

1. Organizing Workflow & Planning

The most important part and the literal start of any project is the planning stage which is basically the core of the whole process. This step defines who a project will be performed and how will it take shape so that the desired quality can be ensured and achieved in the future.

Large companies tend to use comprehensive solutions like MS Project that are designed for larger teams. For smaller teams though, it’s a different story. There are a lot of different alternatives on the market which you can equip yourself with that don’t have all of the fancy features of those comprehensive solutions, but they still get the job done with their planning and roadmap features, useful for visualizing future project progress.

2. Communication

As it is a major factor in almost all of the techniques and methodologies in not just the project management context but also in other fields of the market, communication within a project team needs to be frequent and effective. You can use emails for all of the formal stuff, but you can also use applications like Skype and Slack for impromptu conversations among team members which will increase team collaboration resulting in positive growth in productivity.

3. Scheduling and Time Management

Money is the top factor in the development of a project or anything really. And while in certain projects you are allowed to spend more resources and time quite thoughtlessly, you have to be careful in the other projects where you spend the revenue.

This is because of the limited resources and time, that the project has from the start and also because you should not spend valuable resources on teams and equipment that might not even be available when you are envisioning the work to be done. So, you should always schedule ahead and clarify/ confirm the dates with all of the team members before spending all of the revenue on an empty room full of resources but no manpower.

nTask provides you with a scheduler and a time management tool that can keep track of time spent on specific tasks by the individual team members and all of the relevant time stamps inputted by the staff, so you can schedule accordingly. Utilizing these project management tools and techniques can be a lifesaver.

Conclusion

Project budgeting is a key part of any business. By understanding how project budgeting works, making predictions about what will happen in the future, and utilizing predictive tools to make sure that your project stays on track, you can ensure that your business succeeds.

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