How do I track project costs in Microsoft Project?

Microsoft Project is a project management software program that allows users to create and manage project plans. One essential aspect of project management is tracking the costs associated with a project. To effectively track project costs in Microsoft Project, users need to understand the software’s capabilities and use them appropriately. This article provides a comprehensive guide on how to track project costs in Microsoft Project.

Setting up Cost Resources

To track project costs in Microsoft Project, the first step is to set up cost resources. Cost resources are expenses associated with a project, such as equipment rental fees, travel expenses, and material costs. Here are the steps to set up cost resources in Microsoft Project:

1. Open Microsoft Project, and select the project you want to track costs for.
2. Click on the “Resource Sheet” button on the top menu bar.
3. In the resource sheet, add the names of the cost resources you want to track and enter their hourly rates or flat fees.
4. Save the resource sheet.

Once you have set up your cost resources, you can assign them to tasks in your project plan. To do this, follow these steps:

1. Double-click on the task you want to assign a cost resource to.
2. In the “Task Information” window, click on the “Resources” tab.
3. Click on the “Add Resource” button and select the cost resource you want to add.
4. Enter the number of hours or the flat fee for the cost resource.

Tracking Costs During Project Execution

After setting up cost resources and assigning them to tasks, the next step is to track costs during project execution. Here are the steps to track project costs in Microsoft Project:

1. Open the Gantt chart view in Microsoft Project.
2. Click on the “View” tab on the top menu bar, and select “Costs.”
3. In the “Costs” view, you can see the total cost of each task, as well as the overall project cost.
4. To update costs during project execution, enter actual expenditures for each task in the “Actual Cost” column.
5. Microsoft Project will automatically calculate the variance between the actual cost and the planned cost.

Analyzing Project Costs

Microsoft Project has several features that allow users to analyze project costs effectively. Here are some tips on how to use those features:

• Use the “Task Usage” view to get a more detailed picture of costs associated with each task.
• Use the “Cash Flow” report to see the projected cash flow for the project.
• Use the “Earned Value Analysis” feature to measure the project’s progress against its budget.

Conclusion

Effective cost tracking is critical for the success of any project. Microsoft Project provides several tools to help users track and analyze project costs. By setting up cost resources, assigning them to tasks, and tracking costs during project execution, project managers can ensure that their projects stay on budget and on schedule.

Related posts

• How to Manage Resource Working Calendars and Project Budget in Microsoft Project
• How Do I Assign and Manage Resources in Microsoft Project?