Managing Project Cost Center
Predicting the project cost beforehand is not an easy task and predicted costs don’t always match with the actual cost when the project is completed. However, a good project planning and reasonable estimates can help you to avoid the changes of going over budget.
Kpi.com offers its Project Budget application to manage your project profit and its costs in a simple way. Moreover, it allows you to distribute budget over each month that the project period covers.
So let’s discuss how it looks. This a sample project of website development. Estimate start and due dates are set, employees are assigned tasks and they entered their timesheet.
Now, to plan your budget for this project, go to Project Budget section. As you can see the table shows each month that the project period covers with Revenue, Expenses and Purchases rows separated.
To plan your revenue, choose a revenue account and enter your budget. Actual revenue will be updated as soon as you issue sales invoices to your customer. In this case, we have chosen Sales and Miscellaneous Income accounts to predict our budget for the given period.
Employee costs are already calculated for you since you have the wage rates for the employees assigned and given estimated time to complete each task. If you have any other expenses, choose an expense account and enter the costs under the Budget column. The same you can do with budgeted purchases.
After you have finished with all the estimated project budget, “Save” the project budget. You can view the totals and the difference between actual and planned profit at the end of the table (scroll further).
Actual column values change when you issue invoices, add expenses and purchase invoices related to this project.
Once the project is finished, you can compare what you have planned with the real project costs/revenue, also generate the PDF version of the report.