The Budgeting Process and Management

Paper Summary:

This paper explains that the budgeting process is not only a management planning tool in that it allows the project manager to figure what resources he has at his disposal and what costs are associated with the project being worked on, but is also a means of controlling a project as it allows the manager to see that resources are are used as anticipated and that the project comes in within its parameters. In particular, the paper takes a look at the capital budgeting process and all that it entails as well as how important it is to the successful completion of a project.

From the Paper:

"These estimating methods apply to all forms of budgeting on the project, but they are especially useful in dealing with capital assets and expenditures. Manpower is one of the crucial needs of any project. Without the number and quality of workers required, the project will fail. This involves a variety of capital expenditures. Among them are salary, taxes for the workers such as FICA and income withholdings, and medical and other benefits. The manager must determine what skills are needed, and how many workers in each skill area so that the levels of necessary compensation can be computed. Also necessary in this regard is a good estimate of how many manhours in each salary range will be required for completion of the task. Such costs are built in to any project, and represent one of the major areas of capital investment."

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