What are some of the ways that a project manager can use budgeting plans to track and compare actual data on project progress? In what sense is some cost reporting not reflective of the actual work performed? How can a project manager remedy this situation?
Just because money is spent on a project, it doesn't necessarily mean that a project is on task. Let's say you have $100,000 in the budget and your project is scheduled to reach a spend-target of $50,000 6 months after the project begins. You made plans to only spend $25,000 on labor in month four, but because one of your workers was injured on the job during the fourth month of work, ...
Cost planning starts with the proposal for the project, at which time project costs are estimated. And for budgeting purposes, it is best to keep the work packages or activities small in terms of scope and duration when putting together a schedule. Thus, it is important for project managers to closely monitor budget numbers against the actual progress of the project. To help you understand this concept, the excerpt will explain why cost reporting is not always reflective of actual work performed and what you can do as a project manager to keep things under control.