Essential project budget control is vital to ensure that the project’s viability is possible. To do that, you need a cost estimation template that helps you control the money used for each project stage.

This is a crucial step of project management to consider if you want to deliver a project on time.

If you don’t know what this is, this article will help you.

Discover why a cost estimation sheet is essential, how it can help you and who benefits from you managing one of them.

Cost estimation is the process of measuring costs and resources that a project will use in the future. This is a project management task that every Project Manager needs to do whenever a project is starting.

The Project cost estimate document considers multiple elements – work effort or hourly rates – and then calculates them based on your budget.

You can use cost estimation to decide how big a project would be. And in the worst case, to stop its development due to high costs.

When you develop project estimates, you must consider two types of costs.

• Direct Costs: These are associated with a specific part of the project. For example, labor, materials, etc. They are similar to fixed costs in a company.
• Indirect Costs: Indirect costs refer to expenses you’ll have to pay in the long term. These include quality control, insurance, etc.

Once you figure out what your electricity, facilities, and labor costs are – along with the rest of the expenses – you can have the total cost of your project, which will later be used as a budget if it goes within the company’s parameters.

Project managers need to follow seven principles to estimate a project correctly.

1. To know the actual costs of your project, you need to know how big it will be. As you define the project phases, you can come up with accurate prices and estimated hours.

2. Use the WBS (Work Breakdown Structure). This will help you to estimate better your costs on each project unit.

3. Make total costs easy to understand. Since projects are funded by decision-making investments, you need to give shareholders a reason to trust your predictions.

4. Always validate your estimations with contractors and clients.

5. Measure the project’s performance according to how much budget you have spent and how far you’ve gone in the project.

6. Collect as much information as possible about the project’s completion – how much time you need, equipment and tools necessary, phases, and payments made throughout its completion. As a PM, you can track the project’s progress and make decisions based on your research.

7. You will have to collaborate with external parties as the person in charge. So, you will have to apply multiple structures to gather data while managing the project.

Estimating is one of the most important aspects of project development. This is how you figure out the steps to take to deliver a top-notch project that satisfies your client. It’s also how you can determine the tasks you need to complete or delegate.

When you estimate costs, you include the price and time of your team, materials, sequences, meetings, and everything. You put everything together to come up with a number that is close enough – more or less – to the actual costs.

It’s also the base to calm your shareholders and show them that you and your team know what you’re doing.

And the best way to do that is to separate the project into phases. You can control each stage of the task better and ensure that you deliver everything on the due date. For this, you could use a Gantt Chart. 

Even though cost estimation is essential, benefits are still susceptible to change. Especially if there are external factors involved. For example, if you live in an inflationary country, your money could depreciate as the project progresses.

In such situations, the project manager must control expectations and risks that could hinder the project’s development.

To execute a project according to the stakeholders, you must know how to execute the project planning steps.

Doesn’t matter the project’s industry. It can be an HR, creative, or IT project; they all start similarly. 

Here’s how you create a project plan:

1. Find a business proposal, create a first draft and analyze it.

2. Customize and submit it to stakeholders to find resources and approval.

3. Define the scope of your project.

4. Identify comprehensive goals.

5. Determine outlined deliverables by the professional teams.

6. Create milestones and schedule delivery time.

7. Assign tasks to the teams involved.

8. Spend time making a Risk Assessment.

Here’s when you must include the software you’ll use and other materials to come up with the grand total.

After you have gathered all the information for your project, you still need to send it to the stakeholders for approval.

To control and manage the project, you need a project estimate template that helps you get more accurate estimates.

This document is a PM must-have when you have project schedule tasks and other activities involved in the project. You need this tool to help you visualize data and add notes to your progress.

When To Use a Cost Estimation Template

You should use a Cost Estimation Template when you need to show a spreadsheet that contains all the information about the costs of a project.

Overall, you need a project template when you:

• Want to easily customize a spreadsheet.
• Need to add examples.
• Start monitoring the project’s progress.
• Need to assign tasks.
• Wish to control timelines and give training to the staff.

When you work in the project management department, you need to understand that every decimal counts. This is why you should use only proven tools and templates to help you figure out the best ways to estimate costs.

One of the best tools to use is Microsoft Excel. Users can install this software for free from the official website and then activate it using a serial key from RoyalCDKeys.

This is an effective financial move to save money and make your budget last. You are getting a $250 CD key for barely $13. You will have all functionalities and the entire collection of software that the Microsoft Office 2021 suite provides.

Project Cost Estimate Templates

You don’t need to develop a project estimate template on your own. There are multiple free templates online that you can use on Excel to make an excellent cost estimation and explain your project to the parts involved.

Here are the best project costs templates you can find on Google:

Template #1

Parametric Project Cost Estimation Template - Download Link.

Template #2

Project Cost Estimation Template With Three-Point and Tasks - Download Link.

Template #3

Complete Project Cost Control template - Download Link.

There are other templates online you can find. You could look at the Microsoft store for them and then modify them to your needs.

Learning to estimate costs as a project manager will help you drive a project from start to finish. Measuring costs correctly will save you time and money. It will increase the stakeholders’ trust as you deliver project stages on time.

Without a cost estimate sheet, you could spend more resources in stages, leading to an unfinished project if you don’t control your budget.

Project managers know this. And the only way to avoid this issue is to have an excel cost estimation sheet to control all projects in which you are involved.