Whether your customer wants to see it on a regular basis or not throughout the project, one critical piece of information that the Project Manager must be keeping track of is the project budget. Adherence to the budget is very important to the customer whether they are asking for updates weekly or not and at the end of the project it will be one of the key factors determining customer satisfaction.


In most organizations, during the sales process, an Account Manager or Business Development Manager has worked out a deal with the customer, identified the key roles and an approximate number of hours of effort for each role and overall on the project, and provided the detail that goes into the overall price for the engagement. I’d like to expect that the Project Manager was involved in this process, but that is almost never going to be the case. So, once the sale is complete, this detail concerning the resource hours and overall price that the client is paying for is passed on to the Project Manager to utilize when managing the engagement and associated budget. This detail is particularly important to the customer, who likely has to approve each sale with a superior who will then factor it into the internet tax prep system being used to monitor finances. One incorrect entry can result in quite the mess.

Ongoing budget management

I’m sure we all have our own methods of managing the project budget…since this is my article I will share mine with you now. I’m a proponent of keeping the customer well informed on the budget status. I’d prefer to give them as much detail as they want to see. For me, I take that sales detail – since it has now become the frame of reference for the customer and really can only be changed by identifying out-of-scope items and change order work – and create a detailed forecast for the project.

Share the knowledge

The information you put into a budget/forecast report like this is great, but it's not very beneficial if you don't share it with others.  Everyone on your project should see this report regularly.  It should be a discussion topic as part of your weekly delivery team meeting if you have one.  Make each team member aware of where the budget status is overall as well as where their hours stand against the original forecast for the project.  If they are well over their allotment of hours, then it definitely deserves further discussion and analysis.

I'm a big proponent of making sure this information goes in front of the customer, too, even if it doesn't include the forecast information.  I generally make two nearly identical reports - one includes the forecast and one does not.  If you're basically on target budget-wise, then showing the customer a report that indicates you will go over budget by a small percentage may cause them to unnecessarily dwell on that issue when we all know that will fluctuate as the project winds down.  Whether you provide them with this specific report on a weekly basis or summarize it in a section of the weekly Project Status Report is up to you and the customer, but always make the customer aware of any major budget concerns as early as possible.  That will make it less painful for everyone - customers do NOT like surprises.