Tips & Tools for Precise, Profitable Project Expense Tracking

Tracking project budgets isn't just best practice; it's crucial to keep your organization profitable and open for business. We've worked with teams navigating a variety of growing pains, helping them conquer these learning curves and achieve continued growth.

We've built Workamajig with powerful project cost management and budget tracking tools designed for real-world project management workflows. But before we explore our solution, let's walk through the key strategies for mastering project expense tracking.

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Best Practices for Project Expense Tracking

Use a dedicated system for managing project costs

Tracking project costs in spreadsheet systems like Excel might work for smaller teams, but as your projects grow in complexity, you'll need a stronger, dedicated solution to track project costs within project workflows.

Project management software with integrated budget tracking allows you to:

• Create accurate estimates and track actual costs in real-time.
• Aggregate project-related expenses for a comprehensive view of costs.
• Automate data entry to eliminate human error.
• Access your budget information from anywhere (office, home, or on the road).
• Free up time for billable work instead of manual data entry.

Put someone in charge of the task

Even with great systems, someone must monitor and be accountable for the budget. This is usually the project manager, though bigger teams may designate another member.

This team member should be responsible for:

• Monitoring costs as projects progress.
• Comparing actual expenses to budgets.
• Addressing potential issues before they become actual problems.

While project management software can automate most budget-tracking best practices, having an assigned budget owner ensures that nothing falls through the cracks.

Accurately calculate budgets & set a baseline before kicking off

Before your project begins, establish a clear baseline budget that serves as your reference for all future tracking. Your baseline should include:

• Scheduled start and end dates (for all phases and completion dates).
• Planned efforts and resource requirements.
• Comprehensive cost projections (including internal labor costs, freelancers, vendors & materials)
• Expected revenue and profitability.

This baseline is the foundation for making meaningful comparisons between what you planned and what is actually happening. With an accurate reference point, you can calculate ROI and track performance through the entire project lifecycle.

Track project costs & schedules in real-time

Arguably, the most important advice we can give is to track project costs in real-time. You should:

• Integrate time tracking into project workflows to record hours and calculate labor costs as teams complete tasks and project phases.

• Monitor project-related spending across all accounts and spend cards; connect credit cards to pull in expenses as they’re incurred, and incorporate those into budgets.

• Record vendor costs as soon as you receive invoices.

You should also compare invoices to cost estimates to assess vendor quality and reliability. Are they delivering on their promise, or are you paying more in the end? It helps to use purchase orders (POs) as often as possible with third-party vendors, to lock rates and avoid unexpected costs.

Establish cost thresholds

Cost thresholds are specific spending limits that trigger actions when reached. Think of them as financial alarm systems for your project that tell you when to intervene before significant issues arise.

Agencies and creative teams often set thresholds for:

• Different project types (marketing strategy vs. print campaigns).
• Specific project elements (design, copywriting, development).
• Resource categories (internal labor, contractors, materials).

For example, if you've allocated $5,000 for video production on a marketing campaign, you might set these thresholds:

• $3,750 spent (75%): Review remaining production tasks and timeline.
• $4,500 spent (90%): Immediate production team meeting to assess completion status.
• $5,000 spent (100%): Manager intervention and possible scope adjustment.

These predetermined limits are crucial because they:

• Provide early warning signals before budgets run into the red.
• Establish clear response plans for each threshold level.
• Eliminate confusion about when and how to address budget concerns.

Planning these thresholds during project setup allows your team to course-correct early and maintain project profitability.

Continually re-forecast budgets & resources

Accurate budget management requires consistent re-forecasting throughout the project. Remember that project costs and project budgets are two different things:

• Your budget is your original plan for spending.
• Your costs are what you're actually spending.

Regular budget reviews prevent minor issues from becoming major problems. We suggest:

• Weekly budget check-ins to compare planned vs. actual spending.
• Regular risk assessments to identify potential budget threats.
• Updates to forecasts based on current project status and remaining work.

And of course, resource management deserves equal attention — your team’s efforts have a direct and significant impact on costs.

Review resource allocations every week to ensure all project activities are covered and optimize utilization. Ongoing assessments help maintain an accurate picture of your schedule and budget status.

Have a plan to manage scope creep

Last, but not least, you must have a plan to manage scope creep.

Scope creep (gradual changes or uncontrolled growth in the project scope) is one of the hardest budgeting challenges to grapple with and the biggest threat to profitability.

Think of those small “one more thing” requests — they often accumulate quickly.

Scope creep commonly occurs when projects aren’t clearly defined or regularly monitored. So many of our best practices above can help you avoid this obstacle. In addition, we suggest:

• Starting with a crystal-clear project plan and ensuring all stakeholders are on the same page.
• Understanding priorities and outlining budgets, constraints, timelines, deliverables, and satisfaction metrics.
• Defining deliverables with specific, measurable criteria.
• Mapping resources to critical project paths.
• Developing a change management plan to evaluate and incorporate new requests.

Remember that effective scope management isn't about denying changes — it's about evaluating them and adjusting project plans and budgets accordingly.

Further reading: 8 Tips for Managing a Project Budget (+ Budgeting Methods)

Workamajig’s Project Expense Tracker

Workamajig integrates project cost tracking and budget management into every component of our project management solution. Our system includes:

• Automated estimating tools that calculate all project costs as you build plans and pull in required resources. Our estimating tool even includes overhead costs and contingencies to generate safer, more accurate estimates that help preserve profits.

• Vendor management module to assign outside work and track POs from Workamajig. This lets you incorporate outside costs into project plans and estimates, and realize vendor costs as you receive invoices.

• Native time tracking, on task cards, to calculate real-time labor costs and record hours down to the specific project activity. This convenience also builds time tracking into the typical user workflow, so users don’t have to switch to another tool or spreadsheet and remember to log hours.

• Change management tools and features to prevent scope creep. You can limit feedback and revisions per deliverable, create change request forms, and establish approval workflows to review requests and update project plans.

• Interactive, visually-friendly project monitoring with real-time budget tracking. Our system also sends real-time alerts about projects at risk of delays or cost overruns so you can intervene before projects run late or you overspend.

Take a look at our project monitoring dashboard and budget tracking functionality below:

On the right-hand side, you see color-coded Gantt charts showing each project’s current phase and status. You can customize these Gantt charts and even change the dashboard’s view to support your projects best.

On the left-hand side, you see status breakdowns by project, with columns for: Financial Status, Project Timeline Status, Status, Allocated Hours, Actual Hours, and % Complete.

Below, you see green, yellow, or red icons, along with details about each project. These eye-catching icons instantly tell you if projects are on track (green), at risk of overruns (yellow), or have already exceeded their timelines or budgets (red).

This dashboard provides a holistic view of each project’s progress and health, and its visually friendly design helps you easily identify what requires attention.

Then, when projects are complete and receive final sign-off, Workamajig helps you account for all costs in project invoices with automated invoicing. Our system supports a variety of billing methods (time & materials, fixed fee, media, retainer) so you can choose the appropriate approach for each project.

Workamajig generates billing worksheets that aggregate all project details and costs, then routes them to managers for review. After managers review and approve worksheets, they can convert them to final invoices and share them with clients.

Plus, this also streamlines invoicing by saving managers from manually creating invoices at project wrap. This time savings equals extra room for value-adding, billable work.

To top it off, Workamajig includes complete general ledger (GL) accounting software, equivalent to QuickBooks or Xero, and robust financial reporting dashboards to improve overall financial management and performance.

Workamajig’s accounting software includes:

• Chart of Accounts
• Credit card connectors
• Automated invoicing
• Receipt management
• Expense reporting
• Reimbursement management
• Integrations with online payment solutions, like AvidXchange, Edenred Pay, and PayFlowPro / Authorize.net, to support payment processing

The financial dashboard comes with dozens of out-of-the-box reports, but you can also create your own to track the metrics most important to your projects and initiatives.

Workamajig’s financial dashboard also includes a Favorites tool, allowing you to star your most frequently used reports and store them in one convenient hub.

Some of our most popular reports include:

• Profit & loss reports (across multiple categories — by project, campaign, client, etc.)
• General Ledger (GL) reports
• Cash projections
• Revenue forecasting
• Project budget drill-downs
• Billable summary reports
• Hourly realization rates
• Key metrics monitor
  
  

Learn More About the Workamajig Way

Workamajig offers an all-in-one solution to manage projects and all of their moving parts successfully. Our system combines:

• Project management software, supporting the full project lifecycle from intake through delivery.

• Resource planning & utilization reports to strategically optimize your available talent.

• Time tracking to calculate real-time labor costs and tie hours to specific project activities (which improves decision-making when planning future projects).

• CRM to manage incoming opportunities and convert awarded opportunities to new projects.

• Client and vendor management to grant external access and manage those relationships.

• User-friendly collaboration tools to facilitate seamless teamwork and keep projects moving.

• Advanced project monitoring with timeline and budget tracking.

• Real-time risk notifications so you have opportunities to course-correct.

• Complete accounting software to support standard processes and agency best practices.

• Financial reporting to measure project success and profitability across various categories and timeframes, and hone in on improvement areas.

What truly sets us apart from other project management tools is our personalized support. We provide all our new clients with guided training so they can learn our best practices and use each Workamajig module effectively.

All clients are paired with a dedicated support agent who helps you succeed in our system from day one. They’ll help manage setup and implementation, provide training, and answer questions along the way.

Request a free demo and take the first step toward more profitable projects.

Related reads:

• The Creative Agency Guide to Creating a Project Budget
• 5 Steps to Creative Project Planning
• 5 Best Media Accounting Software

Originally published September 9, 2015; updated August 8, 2024, and May 9, 2025.