Financial Plan

For [Project Name]

Document Control
Document Information

Document Id
Document Owner
Issue Date
Last Saved Date
File Name

Information
[Document Management System #]
[Owner Name]
[Date]
[Date]
[Name]

Document History
Version
[1.0]

Issue Date
[Date]

Changes
[Section, Page(s) and Text Revised]

Document Approvals
Role
Project Sponsor

Name

Signature

Date

Project Review Group

Project Manager

Quality Manager
(if applicable)
Procurement Manager
(if applicable)
Communications Manager
(if applicable)
Project Office Manager
(if applicable)

2003 Method123 Ltd. All rights reserved.

Table of Contents
TEMPLATE GUIDE....................................................................................1
1

FORECAST COSTS..............................................................................2
1.1
1.2
1.3
1.4
1.5
1.6

FINANCIAL PLAN...............................................................................4
2.1
2.2
2.3
2.4

SCHEDULE............................................................................................................................. 4
USAGE.................................................................................................................................. 5
ASSUMPTIONS........................................................................................................................ 6
RISKS................................................................................................................................... 6

FINANCIAL PROCESS..........................................................................6
3.1
3.2
3.3
3.4
3.5

LABOR................................................................................................................................ 2
EQUIPMENT............................................................................................................................2
MATERIALS............................................................................................................................ 2
ADMINISTRATION.....................................................................................................................3
OTHER.................................................................................................................................. 3
CONTINGENCY........................................................................................................................ 3

PURPOSE............................................................................................................................... 6
PROCEDURES......................................................................................................................... 6
RESPONSIBILITIES....................................................................................................................6
REGISTER.............................................................................................................................. 6
TEMPLATES............................................................................................................................ 6

APPENDIX.......................................................................................7

2003 Method123 Ltd. All rights reserved.

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.

2003 Method123 Ltd. All rights reserved.

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

Unit Cost

Project Sponsor

$/hr

Project Manager

$/hr

Project Administrator

$/hr

role

$/hr

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

Computers

$/item

Furniture

$/item

Building Facilities

$/item

Machinery

$/item

Vehicles

$/item

item

$/item

1.3 Materials
List the materials required by the project and their unit costs in the following table:
Item

Unit Cost

Stationery

$/item

Computer Consumables

$/item

Building Materials

$/item

Power

$/item

Water

$/item

item

$/item

2003 Method123 Ltd. All rights reserved.

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

Unit Cost

Legal Fees

$/hr

Insurance fees

$/hr

Lending Fees

$/hr

Accounting Fees

$/hr

[item]

$/hr

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.

2003 Method123 Ltd. All rights reserved.

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

Jan

Labor
Project Manager
expense type

$ / other
currency

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

Total

Equipment
Computers
expense type
Materials
Stationery
expense type
Administration
Legal Fees
expense type

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

2003 Method123 Ltd. All rights reserved.

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

Jan

Initiation
Appoint Team
activity

$ / other
currency

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

Total

Planning
Develop Plans
activity
Execution
Build Deliverables
activity
Closure
Customer Signoff
activity
Total

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

2003 Method123 Ltd. All rights reserved.

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).

2003 Method123 Ltd. All rights reserved.

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.

2003 Method123 Ltd. All rights reserved.