Budget in a Project

Project Budget and Control Preparing a Budget Top-down budgeting is business-planning system whereby the budgeting process begins with information flowing from the very top of the organization down to the departmental or divisional levels within the organization. The top down approach could be used in a large organization that deals with a project they have done before. The reason behind using this approach would be the fact that this is a big project.

Therefore, an overall estimate would be made of task that are higher in level and then those estimates of higher-level tasks are then used in setting limits of the costs of lower level tasks. The advantage of using this method is the fact that there will be no need of relying on low-level managers to come up with information on budgeting. Therefore, the business will allow lower level managers focus on their specific departments and hence do their level best.

Bottom-down budgeting is a business planning system whereby departments are involved in budgeting and the departmental managers clearly identify and define the anticipated expenditures and projects all year long. A bottom-down approach can be applied in a project that requires particular attention by all the managers in departments such as an organization introducing a new product into the market. The rationale behind choosing this budgeting system is the fact that the departmental managers need to be involved in their respective departments especially when it comes to the budget allocation.

The advantage of this budgeting system is that fact that departmental managers are free to procure all they require as long as they ask for the right amount of money they need. It also allows for clear information flow and the use of detailed data available at the level of project management as the basic source of schedule, cost and the resource requirement information. Project Control Systems The article project controls; what is it and why is it important anyway? Starts by giving a definition of project controls.

Project controls are defined as management actions, which are either preplanned in order to achieve the results that are desired or taken as a measure of correction that is prompted by a monitoring process. Project controls is mainly concerned with metrics of a project such as time, cost, quantities and other resources. The article gives various sub-disciplines where effective control processes are applicable. These include; planning, scheduling and project reporting, earned value analysis and management, cost engineering and estimating, change management controls and risk and delay claims.

Is a simple term the article states that project controls comprise of the people, processes and tools that are used in planning, management and mitigation of cost and schedule issues and any risk that may have an impact on the project. The article also points out the importance of project controls. It states that a successful performance of any project is dependent on appropriate planning. A project execution is based on a diverse project pan and it can only be achieved through a schedule control methodology that is effective.

Therefore the development of a suitable project control system is a very important part in project management efforts. It also points out the fact that planning.