Budgets and budgets

BLOG

Perth, 18^th September 2013

Most of what we do revolves around money and in our project world more specifically around budgets. Getting it right is an art by itself because often budgets are made in the early stages of a project with lots of assumptions in it. But what if your client wants the budget to be fixed and final? I had another round of budget talks today for one of my projects here in Perth and the bottom line really is that client wants to make us responsible for the budget to the extent that whatever happens the budget will be the budget and nothing more. So the question obviously raised is can we log in a price/ budget to 100% certainty. While the architect is budgeting his part, I have been frantically communicating with suppliers to make sure I have got my lighting part properly wrapped up. These figures then go to the QS (quantity surveyor) who himself also needs to be of top experience level to add in all the necessary additional bits and pieces including unforeseen eventualities that adds up to the final budget.

The risk of this total approach, if I may call it that way, is that each and every one will buffer up his or her quote to make sure they do not end up at the short end of the stick! So in the end we may well end up with a budget that is way over-quoted rather than a sharply tendered price. There is something to say for both approaches I guess but it is probably good financial governance to make sure budgets are properly logged in and not over-spent. In many multi-national corporations, such as with this client, getting approval for budgets goes through top level board meetings and having to go back for extra money can be a tedious process. Nobody really wants to go back to ask for more money, basically telling their bosses they got it wrong in the first place…

The morale is, there are budgets and budgets… 🙂

Light Watch 4-158: As we talk about budget we automatically think of minimising cost and what’s less than a single light source? After the sun and candle light, single artificial light source applications can be quite powerful and dramatic!