Now that you understand how to use more complex functions
and formulas to complete your budget, turn the data you’ve collected into valuable information.
Use that information to draw insights from the budget
and adjust your project’s goals and purpose.
Look at the By Category costs you determined in the previous activity...
...and consider whether your expenses are too high in one area.
If you’re uncomfortable with the cost, review the items allotted in that category.
If the actual cost of the items is significantly over the estimate...
...you may need to reevaluate how much money is being spent.
Missing your budget goal by a large amount is a problem that can seriously delay your project.
Brainstorm ways to address the issue.
You could remove the particular line item from the
category if it doesn’t affect the other elements in that category.
You could cancel the entire category from your project plans to save money.
However, consider the consequences of removing a category from your project.
Is it feasible?
For example, you shouldn’t remove permits from a budget plan
and expect the project to be completed.
Some categories can be removed from the plan without affecting other aspects of the project.
Others can cause the project to fail to meet its goals.
Consider your client or audience,
and balance the need to meet your budgetary expenses with the project’s overall purpose.
Instead of removing a category from your project,
consider addressing the specific costs associated with the over-budget line item.
If your actual cost is significantly more than the cost you estimated when your project began,
see if you can find a way to cut expenses.
Try contacting the vendor who was hired to complete the work for that category
and negotiate the costs.
Or, research alternative vendors you can hire to complete the work instead.
If another company or person can charge a rate that is closer to your estimated costs,
you can keep your budget on track.
Now that you’ve adjusted the expenses in a particular category,
look at your by-category costs again.
Do any of the remaining categories stand out as being too big or too small?
Review the categories and be more descriptive.
Reclassifying line items under more detailed category names can help you determine at
a glance which portion of the project needs to be addressed at any given time.
Choose a new category to hold some of your line items.
Add your new category to your data validation list.
Change the selected category for the line items that are in your new category.
Find the total costs for your new category
by dragging the SUMIF function into your actual costs column.
You answered specific questions about your project and used the power of functions
to make changes to your project purpose.
Then you adjusted your budget accordingly to help ensure your project is successful.