5.5.1 Time-Phased Budgets*

In order to achieve effective cost control, time-phasing of project work is absolutely critical.They not only identify budget expenditures for a particular task or work package, but also when these budgetary expenses will be incurred. A sample of a time-phased budget is illustrated in Table 4.3. In this sample, the aggregate budget for a project activity is broken down across various time periods when the various phases of the work on that activity is planned. Thus a time-phased budget will not only show the allocation of the total budget for the various project activities, but also the expected time at which the budgeted monies will be used up. Consequently, the time-phased budget is an excellent project control mechanism, because the project manger can determine during various stages of the project life cycle how much of the budget monies has actually been expended and compare this figure with the planned budgeted amount. The use of the technique of Earned Value Analysis that we is discussed in the Planning and Resource Management course relies greatly on the creation of a time-phased budget. A time-phased budget also enables the project team to compare the schedule baseline with the budget baseline, and thus facilitates the identification of milestones for both schedule performance and project expenditures. In essence, a time-phased budget consolidates the project budget and the project schedule.

Table 5.3 Sample of a Time-Phased Budget

	Months
Activity	January	February	March	April	May	Total byActivity
Survey	4,000					4,000
Design		5,000	3,000			8,000
Clear Site		4,000		1500		5,500
Foundation			6,500			6,500
Framing			2,000	8,000	2,000	12,000
Plumb & Wire				1,000	4,000	5,000
Monthly Planned	4,000	9,000	11,500	10,500	6,000
Cumulative	4,000	13,000	24,500	35,000	41,000	41,000

*Please Note: Portions of section 5.5.1 were adapted from Pinto, J. K. (forthcoming). Project Management: Achieving Competitive Advantage. Upper Saddle River, NJ: Prentice Hall.Used with Permission.