Project Budget Management with Open Source Software Howto

(Please click on the hexagons for more information)

This tutorial explains how to plan and track project budgets with open source software.

Open source means that this solution is free and easy to modify. You can try these tutorial instructions directly on our demo-server or install the software on your laptop in 15 minutes and work there. There is no limit with the number of users or whatsoever.

Project Budget Management Summary

  1. Every ]po[ project already has a budget item that serves as the top parent item.
  2. Create budget items below the parent.
  3. Specify the type of cost covered by the budget item.
  4. The system will automatically classify all project cost items according to the specs.
  5. Now you can compare the budget value with the actual costs
  6. Click on one of the "actuals" cells to get the details of the included cost items
  7. Click on the "Managers" column to add managers related to the budget item and to setup notifications for alarm levels and budget overruns.

Who needs Budget Management?

Small projects with direct supervision by the responsible senior managers don't need a separate budget management process. Budget management is useful when stakeholders are not directly involved in the project, but want to get a quick overview how the project is going. Therefore you can see budget management as a kind of project reporting tool.

Seen from the project manager's perspective, budget management increases the administrative overhead, exposes errors, create a feeling of tight control, and may feel as something limiting freedom in general. However, senior managers may reduce their involvement in a project with project budget management in place, leading to an increase of trust towards the PM, and effectively increasing the PM's freedom to take decisions.

Introducing project budget management in an organization is widely seen as a step of maturing the project management process. From a tool perspective, the priority is to reduce the administrative overhead for the PM and to provide senior management and stakeholders with rich reporting.

1. Create a new project with a top parent

Please visit our demo-server  and click on "Ben Bigboss" for login.

Gantt Editor with simple project

  • Select the "Project" tab and click on the sub-tab "New Project" in order to create a new project. Select "Classic / Gantt Project" as the project type and enter a fictitious project name, customer and other information. Please enter a numeric value field "Budget".
  • In the portlet "Members" add "Petra Projectmanager" and a few colleagues as project resources.
  • Enter a few activities in the Gantt Editor, set a "Work" amount of planned hour and assign Ben Bigboss or others as resources

Your Gantt editor should now look similar to the screen shot at the right.

2. Create budget items below the parent

Now check the "Budget Tree" widget with the budget hierarchy.

Budget tree with only the top budget item

It should have the same value as the budget you entered during project creation. You can edit this value now independently.

Now press the (+) button to add a new budget item. You can edit the columns Name, Budget Value and Alarm value.

The other three columns (Timesheet Costs, Provider Bill and Expense Bundles) show actual costs incurred in the project. These values are empty, because there are no actual values at this moment.

Let's create two additional budget items directly below "Top". Let's call the items:

Budget tree with thee budget items directly below the top

  • "Internal cost (time sheet)",
  • "External cost (providers)" and
  • "Travel & Expenses".

Please make sure these three items are directly below the Top (and not one below each others). You can drag-and-drop budget items in case you created them in the wrong place.

Your budget should now should look similar to the screenshot above.

3. Specify the type of cost covered by the budget items

Now let's "program" the budget matching so that new cost items will automatically be classified as actuals into the right budget item.

Budget tree with simple matching rules

Go to the header bar and change to the "Match Settings" view. Then select a cost type according to the name of the budget item.

The "Match Settings" view of your budget should now look like the screenshot above.

4. Watch automatic budget classification work

Now is the time to create three different cost items: Time sheet costs, a "Provider Bill" and an expense bundle. These cost items will automagically appear in our budget as actual values:

Budget tree with simple actuals

Log some hours: Go to the "Timesheet" tab, select the current day and enter "1 hour" in all tasks of your project (watch out, there may be multiple projects from other users).

Create a Provider Bill: "Provider Bills" are financial documents that represent invoices received from your providers. Please go the "Finance" tab of the project (not the Finance tab of the top menu) and click on "New Provider Bill from scratch" in the "Other Wizards" section on the right-hand side towards the bottom of the page. Enter a fictitious provider, payment method and cost line(s). For example, let's buy 1 unit of a server for 1000 EUR from Dell with no VAT or TAX.

Create an Expense Bundle: Go to the "Expenses" tab of the project (not the Expenses tab on of the top menu), click "New Expense Item" on the left and enter the data from the receipt of a fictitious meal with the team for EUR 450. When finished and back on the Expenses tab, select the expense item and click "Create Bundle" in order to group the expense item (representing a single receipt) into a bundle to be submitted to HR (handled in a separate document) and that will appear in the budget and the project's profit & loss.

Budget tree with simple actuals expanded

If you now look again at the budget tree you will notice the new cost items that have "automagically" appeared in the respective budget rows. This is because an intelligent algorithm (see below) will search for the best matching budget item every time you create a new cost item.

Your budget tree should now look similar to the screenshot above.

5. Now you can compare the budget value with the actual costs


6. You can click on the actual values to see the details of the included cost items


7. Setup alarm notifications




More Information

  • Questions? Please contact us for a free "guided tour" Web demo with one of our senior consultants. We will answer both your functional and technical questions, and provide you with advice on how to best apply this package in your organization.
  • Budget Planning Over Time - A process to plan the exact timing of budget expenditure. This is used as an input for cash-flow forecasting, detailed project tracking and similar processes.
  • The package documentation contains detailed feature list and the source code of this budget management package.
  • Please see the list of functional packages of ]project-open[ for all available packages. Please let us know if you think ]po[ is missing functionality.
  • You like the package in general, but you want need to introduce some changes? Please contact us. We can provide your team with developer training that will allow you to customize this package to your specific needs.
  • You are already running an older version of ]project-open[ and you want to use budget management? Please contact us for an upgrade of your system to the latest version.


Open Source

We use the open source model to develop our software: Share the source code with others, keep communications and decisions transparent, and facilitate collaboration in a community, and trust on word-of-mouth for marketing rather than paid advertising and an expensive sales force. This model provides great cost savings compared to traditional software development models, which we can pass on to our customers.

However, we still need to finance product development. We earn the bulk of our money from services around our product including installation support, configuration support (including business analysis to some degree), training, system's integration (SAP , ...), custom development, change management and project management. Please contact us for more information.

About the Author

I am Frank Bergmann , the founder and CEO of ]project-open[. I have spent the last 20 years implementing business software in more than 300 medium to large organizations. You can contact me directly at [].

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