To ensure that the project is managed on-budget, the team will use a variance analysis approach to monitor each component of the project budgets. Each month’s expenditures will be compared with the established budget for each component, with the main focus of keeping expenditures below budget while still maintaining quality. Each month the budget will be examined in reference to the schedule. Trinco will examine the budget closely to avoid fiscal problems. For example, if the monthly report shows that 30% of a budget is spent and only 10% of the work is completed, this would prompt a discussion and require a plan of action. Frequently with large projects, this type of comparison is not made in a timely manner. Trinco’s process of systematic monitoring helps to reduce these problems.
Conversely, if the situation occurs where 10% of the budget is spent and 30% of the work is complete; an explanation would be requested in this case, because this appears to show that there is a potential cost savings. This demonstrates our focus on jointly analyzing budgets and schedules. When this occurs, the team will be able to get a sense of whether the project is progressing within the budget parameters.