5 Quick Tips to Stay on Budget

Bad budget management can easily cause project failure and damage the quality. It’s the leading cause of project failure. What impact will this have on my project budget and team performance, and how much can it cost me? What happens if I am faced with additional requests from a client that leave me with little room for maneuver and ultimately eat my entire project budget. You should consider both external and internal factors and be prepared for unexpected costs. You don’t want unexpected costs. It is easiest to set up a meeting to discuss the budget and give an estimate of what it will cost to complete the project. The estimation process can be done in a few easy steps:Before you [invoice your client](https://activecollab.com/invoice-your-work), communicate with your project team and find out the amount of time they will need to complete each part of the project. Encourage your team members to take ownership of their projects and keep them updated about the budget forecast. This will help you maintain expectations and ensure everyone works towards the same goal.
Once you have determined the time it will take to complete the project, determine the best pricing model (ideally an hourly rate).
To relieve stress caused by tight deadlines, add 10-20% extra time.
But, carefully defining the project budget is only one part of sticking to the budget. And avoid potential budget overruns, you need to:[track the time](https://activecollab.com/time-tracking-project-management) spent on every single step of the project
Keep track of your expenses. If you don’t know how much each month you spend, you won’t be able to tell when you’ve exceeded your budget.
With so many things to keep in mind, you are probably asking yourself: How can I keep track of all the tasks and expenses when I am [working on multiple projects](https://activecollab.com/project-management) at the same time?With ActiveCollab, your budget becomes a living part of your project – you can track it, review it and adjust it with your team and stakeholders on a regular basis.Here are a few things you can do to keep your budget under control:Tip 1
Tip 2: Budget and hourly rates should always be clearly communicated throughout the project.
Take each task and estimate the time it will take to complete them. The task’s team member will be able to give you an exact time estimate. Tip 3
Each member of the team should track their time working on the task using an AC timer. This will give your team a clear idea of how much time and effort each task requires. This will help your team identify areas where they need improvement. Tip 4
Your team should note any additional costs (such as software) that are required to complete a task. These expenses should be included in the original budget and should be precalculated. Tip 5: If unexpected expenses arise, consult your client about budget adjustment.
It is easiest to keep track of all your expenses by keeping them in one place, either on paper or digitally.