Financial Plan For [Project Name]

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Table of Contents
TEMPLATE GUIDE..........................................................................................................................1 1 FORECAST COSTS.......................................................................................................................2
1.1 LABOR ..............................................................................................................................................................2 1.2 EQUIPMENT ........................................................................................................................................................2 1.3 MATERIALS.........................................................................................................................................................2 1.4 ADMINISTRATION ..................................................................................................................................................3 1.5 OTHER..............................................................................................................................................................3 1.6 CONTINGENCY.....................................................................................................................................................3

2 FINANCIAL PLAN.........................................................................................................................4
2.1 SCHEDULE..........................................................................................................................................................4 2.2 USAGE..............................................................................................................................................................5 2.3 ASSUMPTIONS......................................................................................................................................................6 2.4 RISKS...............................................................................................................................................................6

3 FINANCIAL PROCESS....................................................................................................................6
3.1 PURPOSE...........................................................................................................................................................6 3.2 PROCEDURES......................................................................................................................................................6 3.3 RESPONSIBILITIES.................................................................................................................................................6 3.4 REGISTER..........................................................................................................................................................6 3.5 TEMPLATES.........................................................................................................................................................6

4 APPENDIX..................................................................................................................................7

ii

Template Guide
What is a Financial Plan? A Financial Plan identifies the financial resources required to undertake the project. A typical Financial Plan includes: A list of the costs likely to be incurred on the project such as labor, equipment, materials and administration costs A schedule of when each respective cost is likely to be incurred Calculation of the total cost of each activity outlined in the Project Plan.

To comprise a Financial Plan, the following steps are undertaken: List the types of costs to be incurred on the project Identify the cost per unit for each cost type Identify when each of the costs will be incurred by completing a Cost Schedule Identify the cost per activity by completing a Cost Usage table.

When to use a Financial Plan A Financial Plan is usually constructed near the end of the Project Planning phase, after the Project Plan and Resource Plan have been identified. Although summarized financial information may be provided within the Business Case, Feasibility Study, Terms of Reference or Project Plan, a detailed Financial Plan cannot be included until every activity and task within the Project Plan has been identified. For simple projects, it may be necessary only to enter the overall cost against the project activity (on the Project Plan), especially if using a planning tool such as Microsoft Project. For larger more complex projects, a full Financial Plan (provided by this document) should be completed to ensure that the overall financial expenditure required is both accurate and appropriate. Following the completion of the Financial Plan, the Quality Plan should be documented to identify the quality processes for ensuring that the project delivers the required solution within the forecast expenditure provided by this document.

How to use this template This document provides a guide on the topics usually included in a Financial Plan. Sections may be added, removed or redefined at your leisure to meet your particular business circumstance. Example tables, diagrams and charts have been added (where suitable) to provide further guidance on how to complete each relevant section.

1 Forecast Costs
This section identifies the tangible and quantifiable costs which are likely to be encountered within the scope of the project.

1.1 Labor
List the types of roles within the project and their unit costs within the following table: Role
Project Sponsor Project Manager role

Unit Cost
$/hr $/hr $/hr $/hr

Project Administrator

Note: Any internal or external labor role which requires project expenditure should be listed here. This includes external consultants, contractors, government bodies and suppliers.

1.2 Equipment
List the items of equipment required by the project and their unit costs in the following table: Item

Unit Cost
$/item $/item $/item $/item $/item $/item

Computers Furniture Building Facilities Machinery Vehicles item

1.3 Materials
List the materials required by the project and their unit costs in the following table: Item
Stationery Computer Consumables Building Materials Power Water item

Unit Cost
$/item $/item $/item $/item $/item $/item

1.4 Administration
List any administrative costs to be incurred and their unit costs in the following table: Item

Unit Cost
$/hr $/hr $/hr $/hr $/hr

Legal Fees Insurance fees Lending Fees Accounting Fees [item]

1.5 Other
List any other costs to be incurred and their unit costs in the following table: Item Unit Cost

1.6 Contingency
List here any contingent costs which should be taken account of. Contingent costs are those which are unpredictable during the planning phase but are included to mitigate the risk of exceeding budget. Contingent costs may be either built into the above costs already provided or listed here explicitly.

2 Financial Plan
2.1 Schedule
Now that each type of financial expenditure has been listed, we need to identify when the expenditure is likely to occur. Note: Although a detailed Financial Plan would usually quantify the specific project costs per day, the following table itemizes costs per month for simplicity. Month
Expense Type Labor Project Manager expense type Equipment Computers expense type Materials Stationery expense type Administration Legal Fees expense type

Jan $ / other currency

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

Total

Contingency expense type Total

Once the project costs have been identified above, it is then possible to verify the: Total cost of the project per month Total cost of the project per cost type

2.2 Usage
It is also important to identify the cost of undertaking each activity on the Project Plan. Note: Although a detailed Financial Plan would usually quantify the specific project costs per day, the following table itemizes costs per month for simplicity. Month
Activity Initiation Appoint Team activity Planning Develop Plans activity Execution Build Deliverables activity Closure Customer Signoff activity Total Jan $ / other currency Feb Mar Apr May Jun Jul

Aug

Sept

Oct

Nov

Dec

Total

Once the project costs have been identified above, it is then possible to verify the total cost of the project per activity.

2.3 Assumptions
List any assumptions made during this Financial Planning exercise. Examples include: It is assumed that: The project delivery dates will not change during this project The unit cost per cost type will not change during this project The funds identified will be available as required.

2.4 Risks
List any risks identified during this Financial Planning exercise. Examples include: That the contingency identified is lower than that required during the project That the project scope is extended and further financial expenditure is required That the equipment required is unavailable and additional costs will be incurred to secure additional equipment on short notice.

3 Financial Process
(NB Refer to the Method123 Cost Management Process for a complete example)

3.1

Purpose

Describe the purpose of financial management and the general process for identifying and planning financial expenditure within the project.

3.2

Procedures

Provide a diagrammatic representation of the procedures to be undertaken to request and gain the approval of financial expenditure within the project.

3.3

Responsibilities

Define the roles and responsibilities of all resources involved with the review and approval of financial expenditure within the project.

3.4

Register

The Expense Register records the activities undertaken within the project which incurred a direct financial expense, as well as the method of approval of the expense by the Project Manager. Insert a copy of the actual Expense Register below.

3.5

Templates

Insert each of the templates required to gain approval of a project expense (e.g. Expense Form).

4 Appendix
Attach any documentation you believe is relevant to the Financial Plan. Examples include: Other project documentation (Business Case, Feasibility Study, Terms of Reference, Project Plan, Resource Plan) Organizational Finance policies, guidelines and procedures Organizational Chart of Accounts Other relevant information or correspondence.