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Does the project manager approve time sheets for project team members?

Are there categories of cost or threshold dollar amounts that require approval from
the project sponsor or customer?

Getting the answers to these questions before spending the money will eliminate
problems and confusion later in the project.

Tracking project expenses as they’re incurred is not always the responsibility of the
project manager. Once the cost estimates have been provided and the project budget is
established, the actual tracking of expenses may be performed by the accounting or

finance department. Some organizations use their program management office (PMO)
to oversee project budgets, approve expenses, track all the project budgets, and so on.
Make certain you know who is responsible for what actions regarding the budget.

No matter who actually tracks the budget expenditures, as the project manager, you’re
the person accountable for how the money is spent and for completing the work of the
project within budget. You’ll want to monitor the budget reports regularly so you can
identify any overruns and take corrective action to get the budget back on track.

Set up a routine meeting with all the budget analysts from the various
departments providing project funding so that everyone is aware of the status of
the project budget at any point in the project.

Now let’s look at how to create the project budget.

Creating the Project Budget

Project budgets are usually broken down by specific cost categories that are defined by
the accounting department. A few examples of common cost categories include salary,

hardware, software, travel, training, and materials and supplies. Make certain to obtain
a copy of your organization’s cost categories so that you understand how each of your
resources should be tracked and classified.

Check with your PMO or accounting department to see whether there are
standard budget templates that you can use for the project.

Project budgets are as varied as projects themselves. Although the format for budgets

may be similar from project to project, the expenses, budget amounts, and categories
you use will change for each project.

Most budgets are typically created in a spreadsheet format and may be divided into
monthly or quarterly increments or more depending on the size and length of the

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