A budget estimate is a preliminary assessment either of funds projected to be available to a company or agency, or of funds required to complete a project. These estimates provide valuable information for planning purposes but are not final. As final information comes in, staff members can update the document and determine if any changes are causes for concern. These documents may be available to the public when they involve publicly funded agencies and projects, to allow members of the public to participate in the budgeting process.
In the case of an estimate of available funds, a budget estimate is usually issued by a regional government or agency. The document discusses possible sources of funds like tax revenues, grants, monies from government agencies, and revenues from fines and fees. This provides information about the available operating budget. Staff members and other parties with an interest can review the estimate to learn more about funding priorities and the various funding options that may be available. Funds set aside for specific purposes are marked in the estimate to make people aware that they are not part of the general fund.
Other budget estimates determine the costs associated with a given project or assignment, like building a bridge or completing a home. This document breaks down expected expenses, given the available information. It can cover costs for permits and fees, labor, supplies, and other expenses that may arise. The budget estimate can also discuss the timeline and provide information about what may happen if the project goes into overtime because of unexpected events.
Firms preparing project bids for clients typically need to prepare a detailed budget estimate to make the client aware of all the potential expenses. This estimate is typically valid for a limited time only. If the client waits too long, costs for supplies, labor, and other expenses may rise with market forces, and the estimate will no longer be accurate. The budget estimate also typically includes an entry for predicted overruns, so clients are aware of how much money might be added to the expenses by the end of the project.
In reviewing a budget estimate, it can help to read individual categories with care to understand what they mean. If definitions are unclear or the document is vague, the person who prepared it should be able to provide information. Budget estimates can also include alternatives; a construction firm might, for example, discuss the costs of different kinds of shingling in the document so the client can learn about how various choices may affect the overall cost of the project.
