Prepare and Monitor Spending Plans, Unit Manager or Project Manager

Teams need a common way to identify and track the cost of their contribution against the return on this investment.  This activity prepares a consistent and focused spending plan (cost in local currency) for the team, or programme or project, etc.  The spending plan covers the following key elements:  resource costs, materials used by the team, and purchased items requiring an external purchase.  The steps to produce the spending plan are:

• Establish resource rates for roles in the department
• Obtain the latest resource requirements and multiply by the base rate.
• Identify any materials that are used from inventory
• Identify the cost of any purchased items and which month the likely spending will occur.

• Rates established for roles within the organisation
• Cost Forecasts by fiscal month identified
• Actuals tracked against monthly forecast.

• Template Links
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• PMGT_FRM015 - Annual Spending Plan - USA
• PMGT_FRM015 - Annual Spending Plan - UK
• PMGT_FRM015 - Quarterly Spending Plan

• Establishing rates for roles

Cost Management

• Reference 1
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Establishing Rates for Roles

The rate used in a resource forecast is very important to provide a measure of both project investment cost and resource utilisation of a department.  This process generally involves the following:

• Establishing a total cost based budget for the department (ie from the operating plan).
• Calculating the direct hours that can be delivered by the team by role (direct delivery against objectives)
• Calculating the indirect hours that are allocated to the development of the organisation.
• Allocating costs to the indirect expenses for the organisation
• Dividing the total budget by the direct labour hours per role.
• Reviewing the risks and contingency built into the rate from the plan (availability of resources, availability of direct work).