Free «Budgeting» Essay Paper

This paper gives a clear demonstration that will enlighten the project manager on the importance of including the additional 15 percent on the time and expenditure in the completion of the project. The objective of any project is to implement the proposed budget to the letter; this is because the company will want to achieve the best possible results and outcomes of the projects. However, as time goes by the cost of living changes to the extent of affecting the normal operations of the company. This forces it to fit into the changes that are encountered as a result of the change in the operations caused by the outside players; this will help the organization to achieve its mission of completing the project effectively.

This will automatically force the contracted company to adjust its budget by either increasing its proposed budget in order to cater for the changes that are being encountered in the market (Vohwinkle, 2011). It is therefore noted that there is always a change in the prices of the products and services that are budgeted in the project; thus the company will have a shortage in the budget to complete the project. This is as a result of the initial plans of the company failing to meet the requirements of the market. For this reason the company must adjust the budgeted project to meet its project needs to fit into the changes in the market.

 

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The main reason that has forced me to add 15% into the budget is to cover the variables that will be associated with the time and expenditure; this includes the changes in the prices of goods and services, the changes in weather patterns, misinterpretation /misestimating of the costs of products and services, and changing of the main project plan. With the additional increase the project manager will be able to successfully complete the proposed project and thus ensure that they offer the best quality project (Vohwinkle, 2011).

The results according to my analysis I have the following reasons for the inclusion of 15% in the proposed budget as a way of ensuring that the project doesn’t stall due to lack of the allocation of an extra funds on the budget. They will effectively cater for the excess costs that might be incurred as the project runs and be used in the successful completion of the project.

Secondly the inclusion of the 15% in the budget is because of the increment encountered in the prices of the products and commodities that the company will need as raw materials. This will affect the success of the projects since the change in the prices has doubled from the time when the budget was made. This is a clear reflection of the current economical changes that are being encountered in the global market today; which have been experienced due to the prices of fuel. This has led to products increase with a large margin, and these increments have consequently transferred to all other commodities that are used in the project. This has affected the prices of the raw products, transportation costs and the service charges amongst others (Vohwinkle, 2011).

Thus resulting to the estimated budget to be lower than the actual implementation budget, and from these changes it will consequently result to an increase in the proposed budget. The unexpected increase in the budget will ensure that the company succeeds when implementing the real project; thus ensuring that the company is able to complete the intended project without any failure i.e. with the appropriate standards and quality. For this reason the increase is essential to prevent the company from running out of money or time. With the approval of the increase in cash and extension in time the project will be of high quality and will serve the intended purpose without fail.