Assumptions
What might constitute a budget assumption? In general, a company's assumed estimated expenses or financial expectations might refer to items that are conjectured to remain the same (or are certain) over time. Assumptions add to risk because they might not prove accurate in the long term. Available information (data) will help when it is time to make budget assumptions.
Examples of budget assumptions include2:
- Resource assumptions (people, materials, funds will be available when needed)
- Technology assumptions (hardware, software, and tech support is available)
- Time-based assumptions (scheduling any project timelines; often affected by the availability of critical resources, requiring contingency plans)
- Quality/specification assumptions (quality, safety; any issue that might cause work to be redone)
- Cost assumptions (eg, past expenses/costs for salaries, contract items, reagents, supplies, utilities)
- Local/environmental assumptions (location of the work; identify any potential risk management concerns, such as weather/flooding, damage - which might cause the work to be moved at great expense)
