In order to be able to assess the necessary financial resources for your project and to be able to allocate them proficiently, you need expert budget planning.
With every project, regardless of its size and complexity, only a limited amount of resources is available in the company. In order to use these funds precisely, a thoroughly thought-out and well-organized budget plan is not only useful, but even an important prerequisite for the project success of the company.
With advanced budgeting app and finance monitoring, you can have a better means of handling finances.
Economy development: What to pay special attention to during budget planning?
Note the return on investment
With every project you must guarantee that your budget stays realistic, since you also must achieve your return on investment. So it’s important not to underestimate your own profit margin when budgeting.
Open up different sources of finance
It’s always an advantage not to be dependent on just sole investor. Therefore, it is advisable to find out about the current subsidy options. These can be organized not only by the state, but also by the private sector, for example by a foundation.
If you get these grants approved, you can assure every investor that they will not only bear the entire project risk. This increases your negotiating position considerably.
The employees’ involvement in the company
If it is possible for you, involve your team in the budget planning. The company’s employees as technical experts can contribute important information to the plan with their knowledge and experience, which makes a cost estimate more reliable and more accurate.
If you are part of a big project and cannot take over the budget planning yourself, you should of course delegate. However, it is strongly discouraged to leave the budget planning solely to the bookkeeping department.
Use the right margin of safety
Regardless of how carefully you plan your budget, you can never predict everything in your budget plan. Therefore, a safety margin is important in the company’s budget planning. However, you should not overestimate your expenses. This deters potential clients.
A safety margin of 5% may be acceptable for risk items in budgeting. A better and more common practice is to set a management fee mark-up at 10% of the total budget. This is a legitimate and appropriate item in any budget table.