A project budget is the financial blueprint that defines how much the project will cost, where funds will be spent, and how performance will be measured.
It converts the cost estimate into a time-phased and accountable financial plan.
Key Components of a Construction Budget
Steps in Budget Development
- Define Scope Clearly – base the budget on the approved WBS.
- Convert Estimates into Budget Categories – organized by cost codes or divisions.
- Integrate Cash Flow Forecasts – determine expenditure by month or quarter.
- Include Contingencies and Escalations – account for inflation, labor/material changes.
- Get Approvals and Baseline – lock the budget before procurement and execution.
Deliverables
- Project Budget Report
- Cash Flow Chart
- Budget Approval Sheet
“A good budget is not about precision; it’s about preparedness.”