Approaches to Budgets:
The budget approval cycle
Experienced Project Managers understand that there is an error band associated with the estimated cost at completion until the final bill comes in – and sometimes that is up to several months after the end of the project! Therefore, experienced project managers present not just a cost estimate, but also an estimate of the error band. Similarly, experienced organizations match their approval levels to the accuracy levels as the project progresses.

Here is an example of how one major multinational firm matches its approval lifecycle to the cost estimate lifecycle. This organization refers to these as “Phase Gates” to determine financial survival at each gate.