The purpose of this article is to share best practices for how to calculate and create an accurate budget for your matter.
Setting a good matter budget lays the foundations for reliable cost control and forecasting. Estimating a matter’s budget can be tricky to do well. However, your spend data is an excellent resource for helping guide you along.
Whilst the report builder is useful for deep dives into your data, there will be times when you just want a quick point of reference to inform your budget.
Before setting a matter budget:
- Navigate to the Search/Add Matters page.
- Filter your matters based on some of the details of your new matter e.g. filter to matters from the same vendor and matter category.
- Click Search.
- Sort the matters highest to lowest based on the budget.
- Of the matters with a budget set, find the middle budget. This is the median.
- For example, if you have 7 matters with budgets, the 4th from top will be the median.
- If you have several pages of matters with budgets, go to the middle budget on the middle page.
- If you don’t have many matters with a budget set, look to the spend of completed matters instead.
- E.g. if your new matter has many unknowns, consider adding 20% to your budget.
You now have your budget estimation. Remember, it doesn’t need to be perfect. Budgets should be revised whenever you learn more information.