Question

What are the main objectives to creating a project budget? Why is it important to control costs in the project management process?

Answer 1

Budgeting is all about developing and estimating of all the expenditure and financial action will need to take throughout the project process. Budgeting is concerning for every aspect which are involving during the project process and their financial impact on the project.

These are the following objectives to creating a project budget -

1) Budgeting providing the structure to project.

2) Budgeting providing prediction of cash flow for a project.

3) Budgeting providing allocation of resources on particular project.

4) Budgeting providing a measurements for project performance.

5) Budgeting is developing a model scenarios for a project.

Controlling the cost of a project management process is the most effective and prior job of project team because cost is always estimated before starting a project and when cost of project exceeding project cost will increase and it may delay in the project that is why control costs in the project management process very essential.