The complete kit for drawing up a project budget like a pro!

By Nathalie Pouillard & Coralie Petit

Published: 1 August 2025

Drawing up a provisional project budget is one of the stages in project management, and not the least, because it touches on the delicate area of expenditure and financial resources.

A realistic budget that anticipates opportunities, and above all potential risks, will ensure the profitability of the project and therefore its success.

Here are 6 tips for drawing up a budget forecast for your project, a template, an example table and a list of tools to help you! 👇

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What is a budget forecast?

Before getting to the heart of the matter, let's go back to the basics.

The provisional budget is the financial document that summarises all expenditure and income, i.e. forecast costs and income.

In other words, it's a financial plan that also makes it possible to estimate a company's future income and expenditure... And for project management, it's absolutely essential to draw one up, the aim being to anticipate the resources needed and to plan each task as well as possible. ☝️

Why draw up a budget forecast for a project?

Project budgeting is part of a financing process that can be broken down into three crucial phases, during which the project manager must involve all the stakeholders concerned:

estimating the cost of a project → established by referring to the actual costs of similar projects if possible, it is linked to the estimated timescales ;
project budgeting → budget envelopes are defined according to the breakdown of the project ;
cost control.

A realistic financial snapshot of your project, the provisional budget consists of listing, identifying and classifying :

initially, your expenditure
your acquired revenue or revenue in the process of being acquired.

Thanks to this forward-looking tool, you can visualise the feasibility of your project in advance, make adjustments, and aim for balance or the expected margin.

💼 If you're looking for an example of a budget forecast for a business start-up project, read our article dedicated to creating a business plan.

What are the steps involved in calculating a project budget?

Stage 1: defining the project's objectives

It's impossible to anticipate expenditure if you don't yet know where you're going. Start by setting clear, realistic and measurable objectives .

Do you want to launch a mobile app? Organise a company event? Renovate a building? Each goal implies very different financial needs.

Step 2: Detailing the scope of the project

You don't want to be too vague. List :

all the tasks to be carried out
the expected deliverables
the key stages.

In short, set the framework so that you don't forget anything in the costing.

A well-defined scope also helps you to anticipate the limits: what the project does not cover. And that's vital if you are to avoid overspending because of surprise requests.

Step 3: Identify the stakeholders

Who is involved in the project? Customers, suppliers, employees, partners... Everyone can have an impact on the forecast costs.

🧠 The best thing to do is to organise a kick-off meeting to find out their expectations, constraints and available resources. And avoid misunderstandings from the outset.

Step 4: estimate the resources required

Material, human, technical... everything needs to be scrutinised. What will you need, and for how long?

Make a complete inventory. This is where you start to get an idea of the overall cost of your project, even if only approximately.

Step 5: Examine the risks

List the potential risks (delays, price increases, absences, etc.) and assess their impact.

This will allow you to build a safety margin into your budget. And give you peace of mind when the unexpected happens.

Once you've completed these steps, you're ready to move on to the next stage: draw up your budget like a chef. 👇

How do you draw up a provisional budget for a project? A closer look at calculation methods

Identify and categorise your investment items

First of all, identify the investment items, i.e. all the expenditure to be planned, such as :

Direct costs

Operating costs (supplies, sub-contracting),
external labour costs
the cost of purchasing or hiring equipment specific to your project (e.g. supplies, paper, training room hire),
project communication costs (graphics, printing, distribution costs, etc.),
travel expenses, meetings, etc,
the sum of salaries in proportion to the number of (estimated) hours dedicated to the project, known as " full-time equivalents " (FTE).

FTE calculation = gross salary + employee and employer contributions x hours worked x number of months or weeks

Indirect costs

miscellaneous expenses: water, electricity and telephone bills, rent and service charges, insurance, maintenance of premises and equipment,
management costs: salaries for cross-company or sub-contracted services (legal, accounting, security),
taxes and duties,
financial expenses: bank loans, interest payable, agios, etc,
general communication costs, etc.

☝️ The costs of resources allocated to several projects, not exclusively to the project in question, are shared using distribution keys.

Example: To allocate the cost of rent, we take the average occupancy time of the premises according to the size of each project, which we allocate as a percentage.
If project no. 1 occupies the premises 20% of the time, project no. 2 30% of the time and project no. 3 50% of the time, we allocate 20% of the costs relating to rent, electricity, water, etc. to project no. 1 and so on. to project no. 1 and so on.

Diversify your sources of funding

Now it's time to plan your income.

Generally speaking, and particularly for projects in the voluntary sector where subsidies are requested, the provisional budget must diversify the sources of funding (public, private, etc.) in order to :

reassure each investor that not everything is up to them ;
mitigate the risk of one of them withdrawing.

The aim is to achieve financial balance. The purpose of a funder is not to help you make a profit, but to help you achieve an objective.

☝️ In a provisional budget: expenditure = income. A proportion of self-financing is therefore often added to make up the difference between resources and forecast expenditure and to show the organisation's commitment.

Possible sources of income include

sale of products
provision of services
subsidies
partnerships
self-financing, etc.

Value your contributions in kind

Estimate your "valued" expenditure (loan of equipment, loan of a room, voluntary work).

This is all the more important for associations applying for a grant, or companies seeking the participation of a partner: you will often need to translate the sum requested as a percentage of the total project.

If the cost of the venue is increased, the total budget rises, but the percentage requested from the funder falls.

Example of a provisional project budget table

Project budget template to download

🎯 This Excel template is also suitable for a provisional budget for an association project.

6 tips for a successful budget

1 - Break down your budget

Rather than drawing up a budget over the life of the project, try to do it on a monthly basis.

This way, you'll have better visibility and be better able to adapt to any constraints you encounter (change of supplier, delay in one of the tasks). There is also less margin for error.

For example, you can use an Excel table to list the main phases of your project in columns, with the months on separate lines and the costs for each stage at the intersection. It will then be easy for you to add them up to obtain the total budget estimate.

You should also distinguish between each item of expenditure. When reviewing the budget, it's important to quickly identify which items are in deficit and which are in profit.

2 - Involve your collaborators

As project manager, you're in charge of operations, but you can't possibly know all the elements to be anticipated in the accounting forecasts, nor all the expenditure items and needs of certain departments that contribute to the operational phase of the project (marketing, research and development, etc.).

The collaborative dimension is another success factor in project management.

You absolutely must surround yourself with people and involve them in drawing up the provisional budget, so that you can combine all your practical knowledge.

We strongly advise against delegating this task to the accountant alone. Administration and the field must go hand in hand.

3 - Find the right price

It's normal to underestimate or overestimate certain items of expenditure.

Overpricing

Contrary to what you may read or hear, don't inflate expenses too much. Let's say that a small safety margin (+5%) for the most uncertain is allowed, but generally speaking, it's better to stick as closely as possible to your actual forecasts.
It's better to set aside a cash reserve so that you don't have to bear the brunt of an equipment breakdown or an increase in costs, for example.

Some people prefer to add a "management costs" line equivalent to 10% of the total budget at the bottom of the table.

Underestimating

Don't underestimate either: a budget that is too limited can quickly turn out to be a source of problems and conflicts between several tasks, leading to the cancellation of some tasks that are at first sight secondary, yet essential (quality control, for example).

During the project implementation stages, risk factor analysis is precisely what is needed to avoid this kind of situation.

4 - Don't underestimate deadlines either

Time is money. If you're planning to launch a product too soon, postponing it can cause your budget to explode: extending an email campaign, cancelling and postponing the booking of the event venue, and so on.

And if you ask your employees to estimate their future workload, be aware that they will tend to be over-optimistic: add up to 20% safety margin to the time they estimate they will devote to each task (precautionary principle).

The provisional budget should be derived from the provisional schedule in which all the resources have been estimated and allocated.

5 - Monitor the budget rigorously and regularly

The budget is provisional and therefore subject to change. Monitor actual expenditure and the time spent by each team member on each project task.

Compare estimated costs with actual costs to anticipate what's coming next.

☝️ Also keep a record of your calculations so that you can go back over them and understand how you arrived at a particular result. And date your budget!

🎯 To make this monitoring easier and more effective, we highly recommend using a tool like Zoho Projects! You benefit from continuous monitoring and detailed analysis of the budget. Not only do you track the costs and time spent on each task, but you also get a global overview of the budget through dynamic reports and interactive dashboards. So you can stay on track with your budget forecast every step of the way!

Zoho Projects

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6 - Communicate with your team

As a good manager, you know that the success of the project depends on more than just good management.

It depends on the skills and commitment of your staff.
Good communication, particularly around the project budget and its development, will help to :

stimulate collective intelligence
decompartmentalising skills,
combine talents,
ensure good relations within the team,
harmonise workloads,
making employees feel safe,
and therefore eliminate many of the risk factors associated with human resources (accidents, disengagement, overwork, etc.).

Use the right tool

Project management (or project portfolio) software is both a management tool and a collaborative platform.

It is comprehensive, covering all the key stages from project planning to monitoring. On the budgeting side, it enables you to :

compare forecasts with actuals, particularly the cost of human resources, by task or by stage;
monitor the budget in real time
create budget interdependencies between different projects (project portfolio management software, or PPM);
reactively modify and move tasks as the budget changes.

Project management software

Need a dashboard to monitor your project budget? The collaborative working platform monday.com offers a simple, clear tool for estimating the budget upstream, then analysing the actual cost of each task. Bonus: use the formulas for more in-depth analyses without too much effort.
Project management, task management and project portfolio management software, Proggio's strength lies in putting teams, not tasks, at the heart of its uses.
A project and task manager, halfway between ergonomic task management tools and more complex tools, Wrike is ideal for agile SMEs.

Project portfolio management software

Clarizen is a PPM for more advanced needs, offering budgeting and profitability estimation, as well as monitoring of a project or portfolio operating account, distinguishing between OPEX and CAPEX expenses, among others!

With FoxPlan, you can manage your portfolios in hybrid mode, supporting both agile (particularly to meet the needs of IT teams) and traditional project management methods. This way, you can easily define your budgets for long-term strategic projects over several years, as well as for shorter projects that are exposed to change. All this while anticipating drift and guaranteeing the best possible return on investment for your portfolio.

With PPM Project Monitor, you can optimise the budgeting of all your projects: the software simplifies the collection and evaluation of requests from all business areas, and then the construction of the provisional budget. All this data is centralised and organised within a single tool, making it easier to make decisions, monitor progress and anticipate any deviations. Save up to a day a week in controlling the management of your project portfolio.

IQar's SuitePro-G software lets you set and configure the financial indicators for your projects, manage budget forecasts and report in real time, so you can better control variances and profitability. Visualise the expected benefits of each project, making it easier to make the right decisions.

Teamleader is an all-in-one solution ideal for VSEs and SMEs specialising in digital businesses. Organised around the 3 fundamental aspects of a business - sales, invoicing and organisation - the software helps you to manage a variety of in-house projects as well as customer projects. You set deadlines and monitor tasks in real time to keep within your budget.
A comprehensive and intuitive project portfolio management (PPM) tool, z0 Gravity is easy to use for managing several large-scale projects simultaneously and is suitable for organisations with more than 100 employees.

Collaborative platforms

Asana is a simple, intuitive work management software that helps small and medium-sized teams coordinate and manage their tasks and projects.
Both a collaborative platform and a project management tool, Gladys is a complete digital working environment that lets you manage your projects from A to Z, while optimising productivity and boosting innovation.