‫Cost estimation for zero based budgeting now, this process is fairly simple.
‫When you're creating a cost estimate, you want to categorize your costs based upon the grouping of
‫your activities and categories, which should be determined by your company or your department. For this
‫activity
‫download the cost, estimate or sheet and write down what potential categories you think your project
‫would have.
‫Allocate a budget for each of those categories.
‫And while creating another column for what those actuals may be towards the end. This cost estimation
‫process is very good and ideal for the start of the budgeting process.
‫But the actuals column allows you to revisit at the end of your project and see if you state within
‫budget to create a variance.
‫Of course, at the end of your project, if you weren't able to stay within budget, this would be worth
‫calling out in your meetings, especially if selected to head another project.
‫Now, before you get started, let's take a look at some categories in which you may group those activities.
‫Some common categories are infrastructure consulting, resource allocation, third party services vendors,
‫marketing just to name a few.
‫Again, download the cost estimate or hand out and try to apply it to a current or recent project.
‫If you are unable to apply it to a real life scenario.
‫Create a hypothetical project with potential categories.
‫You can grasp the concept of cost estimation.