Budgeting for Project Management

A solid capex planning schedule connects the investments to the business impact. It should also flawlessly integrate with the balance sheet, cash flows, and P&L. (1) Investment details: If possible, project schedules are best when they’re broken down into components. This may include: • Cost of maintenance • Cost of installation • Cost of equipment • Cost of software • Cost of training A $20 million factory upgrade isn't one line item. It's dozens. If you don’t know what they are, the forecast is wrong. (2) Investment timing: For major investments, a company rarely pays all at once. There may be deposits, installments, and phased deliveries. Order dates and delivery dates change. There are ramp up periods. This timing matters, especially for cash flows. If you don’t know what they are, the forecast is wrong. (3) Lead times: Because capex often is often tied to operating initiatives, there may be lead and lag time. Redesigning the production floor may require ordering months in advance of the installation. If you don’t know what this looks like, the planning is vulnerable. (4) Depreciation impact: Some modelers apply run-rates and others calculate capex and depreciation as a percentage or revenue. While these aren't entirely wrong, they completely ignore the actual makeup of investments, their useful lives, and the depreciation method. It's more accurate to calculate depreciation for the asset or asset category. Then build a depreciation schedule. (5) Revenue contribution: Does capex expand capacity? Open up opportunities to serve new channels? Bring in incremental sales? Ideally the capex schedule ties to the impact on revenue. (6) Cost savings/efficiencies: Not every capex investment has upside benefits. Sometimes operational improvements save costs or improve processes. This might include less scrap, reduced labor hours, automation benefits, etc. Other investments reduce maintenance, replace the need to hire, or improve IT. -------------------- The capex planning schedule should be easy to navigate, seamless to flex, and tie in directly to the operating activities the capex relates to. You can learn more about this technique in Module 5 of Excel: Learning Cash Flow Forecasting (Excel-Based Cash Flow for Financial Planning & Analysis) https://lnkd.in/ezw6HdwU

𝗩𝗲𝗻𝗱𝗼𝗿 𝗖𝗼𝘀𝘁, 𝗤𝘂𝗮𝗹𝗶𝘁𝘆, 𝗮𝗻𝗱 𝗧𝗶𝗺𝗲... 𝗖𝗮𝗻 𝘄𝗲 𝗵𝗮𝘃𝗲 𝗶𝘁 𝗮𝗹𝗹??? Ever heard of the Iron Triangle? (I'll give you a hint, it's not Bermuda's neighbor in the Atlantic Ocean!) Project Managment folks may be familiar with the Iron Triangle concept. Procurement peeps, we can also apply this to vendor contract negotiations. Envision a triangle with each corner representing cost, quality, and time. Changes to one corner usually impacts the others. Having flexibility in one corner, though, can strengthen the others. Use historical data for negotiation planning, making informed choices that balance the triangle based on your business needs. 𝗖𝗼𝗺𝗺𝗼𝗻 𝗻𝗲𝗴𝗼𝘁𝗶𝗮𝘁𝗶𝗼𝗻 𝗹𝗲𝘃𝗲𝗿𝘀 𝗳𝗼𝗿 𝗜𝗿𝗼𝗻 𝗧𝗿𝗶𝗮𝗻𝗴𝗹𝗲 𝗼𝗽𝘁𝗶𝗺𝗶𝘇𝗮𝘁𝗶𝗼𝗻: ➜ Tiered pricing models for greater flexibility. ➜ SLAs with penalties/ incentives to encourage vendors to exceed performance targets, minimal cost, maximum impact. ➜ Paying early to secure discounts. ➜ Efficiency gain clauses, typically requiring YOY gains for the duration of the contract. ➜ Right to audit clause to ensure compliance w/ minimal cost (if any). ➜ Flexible termination language & transition support. Ensures your pocketbook and operations don't suffer if things go south. 𝗔𝗻𝗱 𝘁𝘄𝗼 𝗯𝗼𝗻𝘂𝘀 𝘁𝗶𝗽𝘀: 1. If you're constantly spinning your wheels with subpar vendor quality, rework costs are likely eating into your expected ROI. Keep a close eye on total cost of ownership, the vendor may be costing you more headache than it's worth. 2. Investing in vendor relationships is key. Strong partnerships foster flexibility and innovation, translating to better quality at reduced costs. Win\ win all around! --------------------- What other strategies do you use to balance cost vs quality? Let me know in the comments! 👇

Ever opened a procurement spreadsheet and felt like you’re cracking a secret code? Dates buried in Column AJ. Tabs that seem to multiply overnight. And then there's Primavera P6's construction schedule that needs integrating. The result? Chaos. “Wait, why is this package a year late?” becomes the daily mantra. As a construction planner with 15 years of experience, I’ve seen this disconnect too many times. Procurement schedules and construction schedules often operate in silos. The impact? Countless hours spent "making the data talk". The Challenges 🚧 Silos of Information: Procurement data lives in spreadsheets. Scheduling data in P6. No bridge between them. 🚧 Lack of Standardization: Dates in random formats. Activities with no consistency. Headaches for schedulers. 🚧 Reactive Management: By the time issues surface, recovery options are limited. Here’s how I’ve tackled this problem; ➡️ Clear Mapping Processes - Define how procurement milestones (like material delivery) integrate into the P6 schedule. Standardize formatting. ➡️ Centralized Data Management - Assign one single source of truth. Establish a meeting with the procurement and construction teams to regularly to review and address issues. ➡️ Automation - Reduce the update burden by developing an semi automated or fully automated import process. Create a report that automatically checks procurement and schedule misalignments. The Outcome? When procurement and construction schedules align: ☑️ Teams can plan around when materials will arrive. ☑️ Adjustments happen proactively. ☑️ No surprises lurking in Column AJ. ☑️ The focus is on delivering the project, not updating the data. Let’s discuss ways to bring procurement and scheduling closer together. ♻️ Reposting this could help someone else navigate the chaos. Curious about more tactics and strategies? Subscribe to our YouTube channel https://lnkd.in/gb7FEKN5 Proven strategies and tactics to improve how you plan and schedule in construction.

Cost-cutting has a bad reputation. Most leaders think layoffs are the answer. But $100K+ in savings is hiding in plain sight. I’ve led dozens of cost-reduction projects and saved companies millions. Here’s what I’ve learned: You don’t need layoffs to cut costs. The proof? Companies waste 30% of their budget long before even looking at headcount. Here’s the cost-cutting framework that saves big—without layoffs: The 4Cs of Strategic Cost Reduction: 1/ Cancel: ↳ Audit unused tools, licenses, and low-ROI expenses. ↳ Cut what doesn't deliver 2/ Consolidate: ↳ Merge overlapping tools, processes, or contracts. ↳ One tool, one vendor, one contract 3/ Control: ↳ Create spending guardrails: limits, approvals, and audits. ↳ Track expenses over $500 to stop leaks early. 4/ Collaborate: ↳ Use fractional experts or outsourcing for specialized work. ↳ Pay for outcomes, not hours. 10 Proven Tactics to Cut Costs and Save Big: 1/ Audit Quarterly Subscriptions 2/ Renegotiate Vendor Contracts 3/ Reimagine Office Space 4/ Simplify Tech Stack 5/ Audit Marketing Spend 6/ Extend Payment Terms 7/ Automate Manual Tasks 8/ Use Fractional Experts 9/ Tighten Expense Policies 10/ Focus on High-Impact Areas The truth about strategic cost-cutting? You can save more by optimizing systems than By cutting your greatest asset—your people. What’s your favorite tactic—or what would you add? ♻️Share to help other leaders And follow Mariya Valeva for more

🔍 Mastering Construction Progress with Earned Value Management (EVM) 🏗️📊 In today’s fast-paced construction environment, staying on schedule and within budget is more challenging—and more critical—than ever. That's where Earned Value Management (EVM) steps in as a game-changer. 💡 What is EVM? EVM is a proven method for tracking real-time project performance, offering deep insights by integrating schedule, cost, and scope metrics through 3 key values. Such as, 📌 Planned Value (PV) – What should be done? 💰 Actual Cost (AC) – What has it cost so far? ✅ Earned Value (EV) – What have we accomplished? 🚧 Why EVM Matters in Construction Large-scale projects demand constant, data-driven feedback. EVM empowers 📍 Clients with clear progress updates 📍 Teams with visibility into their impact 📍 Managers with early warnings to course-correct and avoid overruns 🔍 Key Metrics That Drive Decision-Making 📈 Schedule Performance Index (SPI) = EV / PV Efficiency of time usage ✔️ SPI > 1 → Ahead of schedule ❌ SPI < 1 → Behind schedule 💲 Cost Performance Index (CPI) = EV / AC Efficiency of budget usage ✔️ CPI > 1 → Under budget ❌ CPI < 1 → Over budget 📆 Schedule Variance (SV) = EV – PV 💸 Cost Variance (CV) = EV – AC Dollar-based indicators of deviation from plan 🔧 Real-World Benefits of EVM 💡 Accurate progress tracking 💡 Informed planning & resource allocation 💡 Real-time performance insights 💡 Early detection of risks 💡 Trusted project control and quality assurance EVM isn’t just about measuring, it’s about managing. With the right software tools, it transforms raw data into actionable insights, enabling better ➤ Forecasting 📉 ➤Scenario planning 🧩 ➤ Team accountability 💼 ➤Stakeholder confidence 🤝 #projectmanagement #projectmanagementtools #management #managers #engineers #successfulprojectmanagers #construction #civilengineering #civil #CivilEngineering #StructuralEngineering #ConstructionPlanning #ProjectManagement #WBSChart #EngineeringDesign #ConstructionProjects #BridgeDesign #EPCContracting #InfrastructureDevelopment #ConstructionScheduling #PilingWorks #Superstructure #ProjectControls #HSEManagement #QualityAssurance #ProcurementManagement #ConstructionSafety #AsBuiltDrawings #HandoverProcess #LessonsLearned #P6Scheduling #Primavera #ConstructionTechnology #SmartInfrastructure

I've helped dozens of companies tackle budget overruns. Most try complex solutions: zero-based budgeting, new policies, department restructuring. But the most effective approach I've seen? One CEO spent 60 minutes reviewing coffee expenses line by line. Seven years ago, I was managing a team at a different company. Our expenses had skyrocketed, and our revenue wasn't keeping up. So when the CEO called in the head of the worst-offending department, everyone expected the worst. We'd spent the previous week brainstorming ways to prevent the crisis: rebudget, assign a new budget owner, cut next year’s budget by 20%, slice the data three more ways, add new policies—the list went on. But our CEO was over it. So he asked for the previous quarter’s expenses from the most problematic department, called in the department head, and spent an hour going through each expense line. It wasn’t pleasant, it ruffled feathers, and it even involved the CEO grilling the department head about “coffee costs.” But it worked. That department became one of our most efficient spenders the next month. That’s when I first saw the power of the line-by-line review. Ultimately, you want to give your teams the flexibility to spend money, encourage fast action, but still retain control. When done successfully, it changes the culture of how teams spend and empowers department heads to own their expenses. The beauty of the process is that it doesn’t require a kick-off meeting, a PowerPoint, or a team alignment meeting, saving the executive team’s time. All you need to do is: 1. Get the last quarter’s expenses - To keep the review focused, include only the amount, date, and description. Anything else is superfluous, and you don’t want to get caught up in chart-of-account categorization discussions. 2. Sort expenses from high to low - Generally, a quick sort will ensure focus on the "biggest of the small stuff." The one exception to this would be if you notice a huge amount of small costs that add up to a large total when doing your initial review. 3. Go through each line - While this requires nuance, consider asking questions like: • Was this expense necessary? • What was the result of this spend? • What would you have done if this budget line was cut? 4. Ask about missed spending opportunities - This is the KEY step. The goal of a company is to generate returns by spending money productively. So as we cut unnecessary or wasteful spend, we should also be looking for opportunities to spend this money more advantageously. To get to the heart of this, I recommend asking at the end of the meeting: • What could you have spent more on to produce a better result?  • If you added an extra 20% to your budget, where would it go? This is how we learned of a fantastic training course for our sales team that drove record numbers the following quarter. Money well spent! One of the best parts about this approach is that it requires hardly any planning. So why not give it a shot today?

I showed a CFO how to unlock $12M in savings over a 45-minute call. Here’s what I shared. 6 months ago, I got a DM from a CFO at a $300M energy and construction EPC firm. "We’re bleeding cash on every project. I know there are margin leaks… but I can’t see where they are." This is something I hear ALL the time. 90% of infrastructure projects go over budget by 30% or more. Margins evaporate. Fast. The CFO asked: "If you were in my seat… what would you do?" So I told them exactly what I’d do 👇 🔴 The problem? The company was managing complex energy and construction projects. They had: - Change orders piling up - Vendor payment delays - Cash flow inconsistencies - No real-time financial visibility Every day, the CFO was reacting to chaos, not controlling it. ✅ My AI Playbook I told him: “You don’t need 10 consultants or a 2-year project. You need the right systems working together.” We built this 5-part AI Margin Defense System: 1️⃣ Data Consolidation - Connected all finance + project data into Snowflake - Built 1 single source of truth No more scattered spreadsheets. 2️⃣ Predictive Risk Alerts - Used nPlan to analyze thousands of past project data points - Spotted cost overrun risks before they happened We turned hindsight into foresight. 3️⃣ Real-Time Project Controls - Integrated Procore for live project + budget tracking - Automated alerts when line items drifted 2%+ from baseline This caught small problems before they became big disasters. 4️⃣ Dynamic Cash Flow Forecasting - Built live rolling forecasts in Anaplan - Predicted liquidity squeezes 60+ days in advance The CFO slept better at night. 5️⃣ Automated Reporting - Built instant dashboards - Reduced manual reporting work by 70% The finance team got time back to focus on strategy. His results? In just 6 months: - Prevented $12M in potential cost overruns - Increased project margin by 25% - Cut reaction time from weeks to hours - CFO gained full control of project financials All with a system that can be scaled company-wide. My takeaways? You can’t manage what you can’t see. AI-powered financial systems give infra CFOs the visibility + control they’ve never had before. Margins don’t erode randomly. They erode silently. Until you install early-warning systems. Ask yourself… If you’re leading finance at an infrastructure firm: 👉 Are you reacting or predicting? 👉 Do you know (today) which line items are drifting? 👉 Could you spot a $1M leak before auditors do? Want my full playbook? Comment “Control” below, I’ll DM you the full system map. Repost this if you know a CFO who needs to see this. Follow me (@LylyaTsai) for more real-world AI finance wins!

Every budget disaster I’ve seen in multifamily has at least 3 of these 10 mistakes behind it: 1) Assume your rent assumptions are fine (because you made them). Projecting rent by using a flat increase across the board might get you to a total, but it won’t hold up. 2) Ignore the payroll burden. You forgot to get updated taxes and benefit rates from payroll. Now you’re 10% off on wages every month. Good luck!! 3) Not training your staff. Half your managers are new. Most of them don’t know what loss-to-lease means. But sure, you can hand them a template and expect them to fill it out with perfect accuracy. What could go wrong? 4) Skip the part where you talk to the team on the ground. You made all the right guesses. Too bad nobody else knows. If you don’t run your assumptions by the people running the property, nothing's going to work out. 5) No debrief after the budget’s done. Most onsite teams won’t intuitively know what each number represents, how it was built, or what trade-offs were made. So when actuals start rolling in, they default to habit instead of aligning to budget strategy. 6) Pick the wrong marketing mix. You budgeted for the bronze package. But the property needs gold. Now you’re under-spent, under-leased, and spending all month explaining the same $1,000 variance over and over again. 7) Not shopping your vendors. Rolling forward last year’s numbers might seem efficient until you realize the scope changed and pricing went up. 8) Assume everyone knows the numbers. They had one good meeting. And then forgot everything. Unless you’re showing up, staying visible, and helping the team connect the dots, the budget dies on paper. 9) Think details don't matter. It does. Missing line items, vague contract notes, half-baked assumptions. These don’t just slow you down. They multiply into 100+ hours of avoidable rework later. 10) Missing out on known, one-time expenses. You knew it was coming. But it didn’t make it into the file. Now, you’ve got a capital project with no capital. Did I miss anything? PSA: If you're doing any of these, just know you're already setting your budget up to blow up in your face.

Layoffs aren’t the only way to save money. Most companies are sitting on six figures of hidden waste—and they don’t even know it. According to Gartner, companies waste an average of 20% - 30% of their expenses due to inefficiencies, redundant systems, and poorly managed processes. Before you think about cutting people, fix the systems first. Here’s a smarter way to cut costs: Think in 5Cs. 1 - 𝐂𝐚𝐧𝐜𝐞𝐥 Audit all the tools, subscriptions, and services you're barely using. If it doesn't bring clear results, it's time to pull the plug. 2 - 𝐂𝐨𝐧𝐬𝐨𝐥𝐢𝐝𝐚𝐭𝐞 Find overlaps in your tech stack, vendors, and processes. One tool, one platform, one bill—less chaos, lower costs. 3 - 𝐂𝐨𝐧𝐭𝐫𝐨𝐥 Put simple limits in place. Set thresholds for spending approvals and track anything over $500 before it snowballs. 4 - 𝐂𝐨𝐥𝐥𝐚𝐛𝐨𝐫𝐚𝐭𝐞 Bring in fractional experts instead of hiring full-time for specialized needs. Pay for outcomes, not hours. 5 - 𝐂𝐨𝐧𝐭𝐢𝐧𝐮𝐨𝐮𝐬 𝐈𝐦𝐩𝐫𝐨𝐯𝐞𝐦𝐞𝐧𝐭 Set a quarterly reminder to review expenses, renegotiate contracts, and audit your processes. Cost-cutting isn't a one-time thing—it’s a habit. 𝐐𝐮𝐢𝐜𝐤 𝐰𝐢𝐧𝐬 𝐭𝐨 𝐬𝐭𝐚𝐫𝐭 𝐬𝐚𝐯𝐢𝐧𝐠: → Audit subscription creep → Renegotiate vendor terms → Rethink your office space needs → Streamline your software stack → Review marketing ROI closely → Extend payment deadlines → Automate where you can → Hire a fractional instead of a full-time → Strengthen expense approval rules → Double down on high-impact projects If you optimize systems, you can save big, without losing your best people. Agree? What’s one cost-saving move you think every company should prioritize but often overlooks? ♻️ Share this with a founder who needs to hear it. ➕ Follow Donny Mashiach for more insights on scaling and financial growth.

Let’s talk about estimating and how to prevent profit loss.... Several years back I, along with the estimating team, estimated a $1.2 BILLION dollar project. This was in addition to many billions before hand, but this project topped them all. It consisted of several million yards of dirt that needed to be pushed several times, tens of thousands of yards of concrete, including a concrete esplanade that cantilevered over the Hudson River in Manhattan, multiple bridges, utility work, drainage, retaining walls, and dozens of subcontractors varying from electrical, steel erection, landscaping, masonry, asphalt and much more. Not to mention hundreds of vendor quotes! This was the ultimate estimating experience for me, and we all learned a TON of new tricks!!   Now working with small to medium size contractors, I’m always hearing similar complaints. Such as:   1) Why are my profits running away from me towards the back end of projects 2) I don’t fully understand my overhead or indirect costs 3) Historical data is off   While direct costs like labor and materials are more obvious, indirect costs involve expenses such as permits, insurance, overhead, additional non-productive equipment, and labor. Neglecting to fully understand and account for these indirect costs can have significant consequences, leading to financial difficulties, project delays, and even failure. It's critical to recognize the importance of the estimating department's role in thoroughly understanding all costs associated with a construction project.   Over the past 20 years, I’ve talked with many contractors who self-perform work and one of their top complaints and questions is why profits run away from them as they approach the back end of their projects. Aside from project management flaws, below are some costs contractors miss in their estimates   1) Non-productive labor wasn’t accounted for properly. Flaggers, subcontractor support, delivery support, etc.. 2) Equipment wasn’t forecasted properly. What's being rented, leased, purchased, etc.. 3) Escalations aren’t correct. You need to know your schedule and read the quote and have a full understanding of escalations and lead times. 4) Budgets for punch list, weather, labor escalations, small tools, etc weren’t accounted for. Depending on your Niche, company size, GC vs Subcontractor the above will vary.  It's a start and I suggest you look into it. #proaccel #construction #estimating #projectcontrols