When Is It Best To Spend Money In A Project

ane. How much can yous fix in stone at the start?

The more you lot can ready at the starting time the fewer the opportunities for surprises to take hold of you out. This means skillful contracting of suppliers and a clear plan for the earned income elements of the project with as loftier a level of pre-sales or 'early on bird' income as is realistic.

1.ane Managing costs

The advantage of strong contracts with suppliers is that you know what they are going to exercise and what it will price and so instead of an open up-ended set of costs which are simply billed as incurred you have finer put a cap on the amount you lot volition spend on any contracted element.

One style to keep an middle on the fixed versus variable elements of your upkeep is to color code them – greenish for contracted and pre-agreed elements and orange for areas of spend which accept variability in them e.g. travel expenses or food and adaptation bills.

For these elements what your budget tells you is what the maximum spend is. Your job now is to proceed runway of the expenses as they are incurred and brand sure you are not over-spending. To do this y'all need to fix a process by which people involved in the project submit expenses forms (Template 4) with receipts. You need the receipts to prove that the costs were actually incurred. Yous may only demand to testify this internally or you lot may need to prove information technology to a grant funder. For European union funded projects there are fix templates which you should be using to ensure you an provide a full audit trail if required. There may as well be rules and regulations most what costs are 'eligible' – can you spend grant coin on alcohol at a dinner? Can yous claim for a tip that y'all give a waiter? Ordinarily an arrangement or a funder will accept already decided what their standard arroyo is. You lot only need to know information technology and convey it to anyone who is spending coin which they volition seek to claim back from the projection budget!

Who signs off on the costs? A unmarried private needs to be responsible for approving invoices and agreeing that they tin can be paid. Internally you lot need to concord whether this is you as the project leader or the head of the finance department. Again at that place will often be a process for this already set upward in your organisation you just need to know what it is and employ it!

Another meridian tip is to enquire suppliers who may be working across multiple projects to specify which project their invoice (or if necessary individual line on an invoice) refers to. This will assistance you lot ensure that where but part of an invoice belongs to your projection that you do non end up footing the beak for the balance of information technology!

What you want to end upwardly with is a process which enables you to:

Set up the maximum expenditure for an surface area of cost and know what the deliverables are that this upkeep line is covering (that should exist in place from your budget)
Check this planned set of deliverables and costs against both the contracts prepare upward at the starting time of the projection and the invoices for the variable elements which will come in during the form of the project
For those variable costs such as travel, accommodation and subsistence your procedure for receiving an expenses canvass and approval it earlier it is paid by the finance department is what ensures that you don't terminate up incurring costs you weren't expecting or haven't agreed.
Brand sure you know how apace variable costs are known after the month finish – you want to avoid a situation whereby a member of the squad hasn't submitted expenses for several months, you think you lot have an underspend and re-classify the funds only to find at that place is an expenses bill to pay after all!
Stick to agreed protocols for the maximum costs for hotel stays, dinners out etc

Equally time passes through the project you demand to reconcile expected spend against actual spend. This is the reason you have not only a budget but likewise a cashflow.

The question is how often practise you need to update the cashflow so that you lot alter expected spend into actual outgoings and know the real alive state of things? In a long term projection with fairly slow and anticipated activities it may exist sufficient to update your cashflow from predicted to actual once a calendar month. If you lot are correct in the middle of a highly intensive catamenia of activity you lot might want to update your cashflow weekly or fifty-fifty bi-weekly.

This need to rails the difference between predicted and actual is the reason that at that place is a variance column in the cashflow sheet in Template i. This column will tell you lot if you lot are over or under-spending on each line. So if you predicted that y'all would spend £200 on insurance in Jan but at the end of Jan yous discover that the invoice has not been paid then the January actual is £0 but y'all as well demand to suit the cashflow so that the £200 is paid in February when the invoice becomes due. In this case the money will be spent just not in the month predicted and the overall variance volition be nothing if y'all simply motion the spend from Jan to Feb.

Even so if you planned to spend £500 on hotels in January and when you look at actual spend based on expenses claims from members of the squad who are working on the project in fact y'all only spent £471 then the variance column volition show an underspend of £29 in January. Assuming you delivered all the activities you needed to for this lower spend then hurrah and well done for your toll efficiency!

One way to make cost tracking easier is for your projection to exist prepare up in the book-keeping system your system uses. If you lot work for a large system this is something your finance director can set up upwardly. If y'all work for a pocket-size organisation then you could check with your Director how project finances are tracked and whether your book-keeping software tin help you exercise this? Most online volume-keeping systems such equally www.mycake.org (which is designed specifically to meet the needs of pocket-sized artistic companies) have this facility every bit standard.

1.two Tracking and maximising earned income

Many cultural professionals find the predicting of earned income far harder to practise accurately than to upkeep for the costs of a projection. It is in reality a split skill merely one that you lot need to acquire peculiarly as you take on larger projects and more than senior roles.

Have alleviation from the fact that one of the oldest marketing adages is that 'only half of marketing works (in delivering sales) … I merely wish I knew which half!'

This is not to say that marketing is guesswork, far from it! Simply that y'all will probably need to piece of work with your marketing team/agency/freelancers in gild to both predict and track how marketing spend is turning into ticket sales and other forms of earned income. In this sense marketing and sales are across the remit of this e-learning form merely they are important skills which you need to either acquire yourself or find a source of.

We are not looking at marketing in this course but you specially desire to track the first few days of sales after a launch of tickets equally it is your most not bad customers who will purchase first. If they don't buy equally expected you may need to revise either your sales expectations or your marketing budget as you shouldn't await it to just become ameliorate later on!

ane.3 Politely side-stepping invitations to corruption

If you piece of work in this field long plenty at that place will come up a moment, perhaps regularly, when you are asked to participate in corruption of ane course or another. How can y'all avert participating in this whilst keeping your project on rails and protecting your upkeep for the activities y'all want to committee and evangelize?

At the take chances of sounding overly uncomplicated (it never is) I recommend the strategy of making sure you contract all the activities yous want delivered equally tightly as possible and only pay invoices for contracted and delivered activities with associated (and agreed) expenses. This may mean that you have to agree things like the maximum cost for an overnight hotel stay or the allowance for meals and travel; or specifying economy grade tickets not concern grade. It will almost definitely mean agreeing precise deliverables in any contract with a supplier and if this involves a tangible product (every bit opposed to the contracting of time) then you may demand to specify the quality level of the production you lot are ownership so that you tin can compare specification confronting the object that is delivered and billed for.

The good news is that one time you lot gain a reputation for being pedantic and not allowing abuse you should see the requests and invitations reduce in number. Conversely if yous participate in it in pocket-sized ways or permit it to happen on projects you lot manage the likelihood is that you'll exist expected to go along in this vein and the scale of the corruption will increase.

So now you tin:

Set up equally much in stone at the first of the project every bit possible
Update your cashflow regularly (weekly or monthly depending on the level of activity)
Track the income that is being earned, compare information technology to your initial expectations and adjust your marketing upkeep or sales expectations as y'all progress through the project
Obtain updates from the finance squad on variable costs spent in a month
Enable project staff to submit expenses forms so that you tin manage these types of costs carefully
Politely side-step invitations to participate in corruption