As a manager, you probably have a lingering fear about budgeting issues. You likely have even made a few mistakes and learned life lessons from them. Here's a list of some of the more common mistakes that project managers can make, and a few suggestions for avoiding them.
Forgetting About Tax
This is one of the easiest mistakes to make. Your revenue forecast and costs are all written in pen, but if you overlook the percentage off the top, your forecast and actual numbers won't line up. Hopefully, that means that your project is still making money, just at a lower rate.
Often, forgetting tax comes from working with a variety of clients that don't always require the withholding. The best method to avoid getting tripped up is to always factor in tax. Then if the situation goes the opposite direction than you expected, the additional money becomes a bonus, not a burden.
Have you ever anticipated finishing a project within a tight deadline but get waylaid by a holiday or office closure? Without a product capable of automatically keeping track of this kind of lost time, it isn't too hard to forecast a project timeline and forget that the office will be closed and your employee availability will go down to 0%.
Download our guide to learn how to predict and navigate the unique demands of finance and budget planning.
Avoid this issue by thoroughly reviewing all bank and federal holidays, office and even school closures, as well as your team's vacation requests if possible, or using software like Workamajig that does the job for you. The more information you can get about when your workforce might be unavailable during a weekday, the better prepared you can be.
Expecting 100% Availability from your Team
This goes hand-in-hand with holidays. You can't always forecast sick and personal leave, or even coffee breaks taking up a small percent of each workday. A good generalization is to plan for 80% availability from your team, after factoring in pre-planned vacation and holiday time, of course. This allows for office-wide meetings that go longer than you predicted, any other work that might pop up unexpectedly, and the other unplanned time-off situations. This is another area where overestimating can come back to bite you a lot faster than under-scheduling.
Communication might not seem like it would have any impact on budgets, but without it, everything comes to a halt. If the scope changes and the project manager doesn't communicate that to the staff, time is wasted heading in the wrong direction. At best, it results in sunk time, but you might also find that you’ll need to spend more time than would have been originally required to get the project back on track. Kind of like with driving, sometimes there's just a detour, and other times you need to make a u-turn and backtrack.
Have any of these budget mistakes caused an issue in one of your projects? Let us know how you solved the problem in the comments below.