Question

You are currently working as a contractor building state of the art airports. One of the managerial accountants of the company you work for comes to talk to you about the budget for a project on which you have taken the lead. He wants to know your estimate for the cost of the project. You know that your future with the company depends on your performance in relation to this budget. Your best guess for this project is that it will cost $2,000,000.

What do you say to your boss and why?

Answer 1

From the outset, it is extremely important to set realistic expectations with my boss. I would set up a meeting with him and provide a complete breakdown of my budget and the proposed timeline to go along with it.

To start off, I would like to set an expectation just above my initial estimate of $2,000,000. Somewhere between 2,200,000 to 2,300,000. This would afford me some leeway to alter my construction plan in case of any unforeseen changes or bottlenecks. This additional window of 10%-15% would give me the necessary breathing space to complete the project well within budget and show my boss how I had been able to efficiently manage and handle the resources at my disposal.

I would opt to give my boss a detailed scenario analyses where I would break down the cost implications of each scenario, and how each plays into our overall construction plan. This would include a detailed breakdown of the construction costs involved at each stage, and the top quotes from the various vendors that I would have collated beforehand. It would also include a detailed estimate of the labor cost involved, along with raw materials and other overhead. I would also be ready with the approvals from the local municipal authority and any other legal documents that I might need in order to get the project up and running. It is imperative that I show the drive and initiative required to undertake a project of this magnitude. Preparation and attention to detail would be key in my presentation to the boss, coupled with the willingness to answer probing questions. This can be the game-changer in my rise to the top of my profession and it is not an opportunity I am willing to let slip at any cost.