If a project goes over budget, it can spell disaster for you and your team. What do you need to consider before creating a budget? How will you implement it during the project? Find out how to stop the nightmare of "going over" and spiralling costs.

Controlling your budget is the most essential part of any project. Going 'over budget' puts more strain on resources than anything else, and causes more pressure for the project manager and the team. Knowing how you're spending your money at every step of the way also becomes your best indicator for future problems your project might run into. So how do you do it?

Let's say you're overseeing a project of trying to build a new wing of a building. You have three building firms - one doing the walls, one doing the roof, and another for internal furnishings. Bad budgeting would start with simply setting a number (no matter how accurate at this stage) called "building work". You should break it down - not only on how much each individual contractor might cost (maybe one is VAT registered and the other isn't), but also what might jump up to bite you further down the road. What if the builder underestimated his costs for materials - i.e. roof tiles? He's not going to absorb that cost; he's going to pass it on to the project. Always have buffer zones or overheads, and narrow your spend down to what and why you're spending it, then there will be less chance of such a surprise.

Remember to link your budget to milestones and targets. If a milestone is to get quotes from the three different builders before they start work, averaging the quotes will give you a good idea of how much that's going to cost - before you've even contracted a job. Remember that extra costs might come later - VAT might not be added (or in some countries, tips), or other additionals (e.g. the skip to clear away the mess after they've finished) that you may not have thought of.

Using outside knowledge can be invaluable when first planning a budget. Have any similar projects been done before on the same scale? Can you ask for a copy of their reports (which should be transparent?). If you're part of a large firm, you will have a finance and accounting department - can they see savings where you can't? This highlights another aspect of management when you do have the budget - let other people see it and analyse it with you. Someone else may notice a flaw or over/underspend before you will.

Keeping everyone informed is extremely important, especially if a budget changes drastically. Whereas you may think that spending more on what you're managing is fine, if you don't consult with the rest of your team, it may knock their own mini-budget for their job completely off-track. Similarly, let a team know if more money has been "freed up" from savings elsewhere on the project - if they don't know, they can't use it. Being transparent and sharing information will also force you to keep good financial records- what if your boss asks for a project report on how much has been spent so far? If you can't answer how much and what on, then you're going to be viewed in a more negative light than someone who can whip up a detailed cost spreadsheet.

Overall, planning and then sharing is the key to stop your budget going over - and when it does, the most successful skill in business can be the damage control that comes with such challenges. With a bit of training, confidence and practise - you can be ready for it, and so can your team.