Project budget

Project Budget Definition and Explanation

Projects are long term and may stretch over several annual budget periods. The term ‘project’ is used to indicate, for example, the construction of a building rather than a one-off major purchase, normally covered in the capital budget. The long-term project budget has many difficulties, among the cost escalation and design changes. No project will go exactly according to plan. Flexibility and possible re-planning have to be built into the project budgeting process. The project budget is essentially a control mechanism to give early warning of cost and time overruns.

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