How to Forecast a Fixed-Price Project Budget Before It Runs Out

Start With an Honest Delivery Budget

Record the agreed fee, the planned hours by role, and each role's internal cost rate. Include the delivery work that is easy to overlook: project management, reviews, rework, client meetings and handover. A £20,000 fee with £12,000 of planned delivery cost has a planned gross margin of 40%, calculated as (£20,000 − £12,000) ÷ £20,000.

Keep fee and cost separate. A billing rate tells you what you charge; a cost rate estimates what the work costs your firm. Confusing the two can make a project appear more profitable than it is.

Forecast the Remaining Work, Not Just the Remaining Time

At each weekly review, ask the delivery lead to estimate the hours still needed for every unfinished task. Multiply those hours by the expected cost rate of the person likely to do the work. Then calculate forecast cost at completion as cost already incurred plus estimated cost to finish, and forecast margin as (agreed fee − forecast cost at completion) ÷ agreed fee.

For example, imagine a £20,000 project with £7,000 of cost logged. The team estimates another £8,000 to finish. Forecast cost is £15,000 and forecast margin is 25%. The original 40% margin has already narrowed, even though the project has not exceeded its fee or deadline. That is the moment to investigate.

A straight-line estimate can help as a rough sense check: if 60% of the planned work is complete and 75% of the cost budget is gone, the original plan is unlikely to hold. But do not rely on timeline percentage alone. Projects often have uneven phases, and the last 20% may contain the hardest work.

Work Out Why the Forecast Moved

Separate the causes before choosing a response:

More work than agreed: a new request, extra revisions or an expanded deliverable needs a scope decision.

More effort than expected: revisit the estimate and identify the tasks driving the difference.

Different staff mix: senior cover may raise cost even when total hours stay on plan.

Unrecorded work: late timesheets can make a forecast suddenly jump when the missing hours arrive.

The answer may be a change request, a different delivery approach, a reprioritised milestone or an honest client conversation. Simply asking the team to work faster rarely repairs an inaccurate scope or estimate.

Make the Forecast a Weekly Decision

Use a short, repeatable review: check logged time, confirm remaining work, update the cost to finish, and assign an owner to any action. Record the forecast each week. Its trend is often more revealing than a single red or amber status.

If the project is still profitable but drifting, you have options. If you wait until the budget is exhausted, your options narrow to absorbing the cost or creating a difficult surprise for the client.

How Hourglass Approaches This

Hourglass connects time entries, project budgets and profitability views, making it easier to spot budget pressure as work is logged, so a forecast that's drifting off plan is visible from the dashboard rather than discovered at month-end.