Essentially, budget planning is one of the most crucial stages of the development of a Horizon Europe grant application. Your Horizon Europe proposal budget is the prediction of expenses and the breakdown of costs that demonstrates the required resources for the proposed project and serves as a plan for funders to know how the involved parties will operate the project and spend money in every project phase. Budget calculation in Horizon Europe collaborative projects is never an easy task. When multiple stakeholders are involved in this process, it gets difficult to agree on the total budget and project duration.
So how can your proposal and grant application get a desirable outcome, given that it must present the justifications for the cost estimates required for the successful operation of the project?
Before starting the budgeting process, you should have a solid project work plan developed that can serve as the foundation. According to the responsibilities, all stakeholders can then propose a budget and resources required for the implementation of their activities. Since each partner’s budget calculation needs to be reviewed, negotiated, and approved (including repetitive change requests), the larger and more complex the project is, the more difficult it can be to manage this process. Though it can be tough to arrive at a final, agreed upon budget, there are many things you can do to make the whole process and its management easier for yourself and your partners.
Best practices & top considerations for a successful budget calculation in Horizon Europe projects
Understand the expectations of project evaluators
What to ask yourself:
- What expectations need to be met?
- What does the project and the participants need to do to meet these expectations?
- How can I justify that the proposed budget is adequate enough in order to accomplish the goals of the collaborative project?
Prior to starting the budget calculation in Horizon Europe it’s important to ask yourself the questions above. A strong budget will seek to meet the expectations of its evaluators and prove that the budget and its funding is in line with the project objectives and goals. A good budget proves that you’d be able to effectively and efficiently manage funding to successfully accomplish the project goals. You’ll need to demonstrate to funders that you’ll be able to stay on target and follow through with your objectives; basically that your project is worthy of their support. The best way to do this is to make sure that costs are reasonable, transparent, allowable, and related to the research proposal.
Start the budget calculation process by examining and considering your project activities and their costs
What to ask yourself:
- What are the costs of the project activities?
It can be difficult to switch between goals and objectives to activities, but once the project outline is clear, planning the budget will become easier. One of the easiest and most logical ways to plan a budget for your proposal is to start estimating resources and costs to each of your project activities. This is why the first solid outline of your project schedule with activities and deliverables is a vital step before budget calculation.
Choose the right tool to prepare, modify, and manage your budget
What to ask yourself:
- What are the pros and cons of the tool I’m using?
- Is it reliable and trustworthy?
- How much error-prone manual work and double-checking do I still have to do?
- Can it handle the workload?
- Does it meet security and privacy requirements?
Tools like Excel are useful, but how often have you caught yourself adjusting the sheet with formulas and double-checking everything when working with Excel? Some of the downsides of spreadsheets are that they can’t handle issues with consistency and keeping data in sync, they can overload from adjustments and having too many versions from different partners, the data isn’t displayed in real-time, and there aren’t any privacy measures or safeguards against data loss. Consider switching to more powerful and advanced tools to get your budget to the submission stage as efficiently as possible.
Create your Horizon Europe proposal budget in 3 easy steps
Use the powerful budgeting tool of EMDESK to efficiently design and budget projects of any scale and complexity. EMDESK provides a singular platform where all your team members and partners can prepare and manage the budget based on your work plan. One of the biggest benefits of EMDESK is that during the consistent process of budget calculation, the latest data along with any and all changes are instantly visible and trackable for everyone. Sums and funding are calculated automatically, so you can focus on the budget itself.
Step 1: Eliminate redundant communication
Streamline the collaborative budgeting process and design the budget together in real-time by using shared budget views in EMDESK and stop the endless cycle of emails with new document revisions.
Ensure resources and capacities are smoothly and efficiently allocated with powerful collaborative financial planning and analytics features. Instant views provide you with an accurate overview, enabling you to design, update, and optimize a solid financial and resource plan with maximum funding.
Step 2: Use Horizon Europe templates that consider all HEU guidelines and requirements
Stop creating your budget from blank sheets and worrying about meeting all the EU regulations. It’s easy to make sure the budget is being done correctly from the very beginning using EMDESK’s templates for Horizon Europe proposals. EMDESK templates have been created to consider all Horizon Europe guidelines and requirements: applying rules, organizing the budget into the right categories, and applying the right indirect cost rates & funding calculations.
Step 3: Refine the budget using customizable personnel cost rates or cost categories
Start by estimating the efforts and costs your participants are accountable for, including personnel costs, then allocate them to the required activities, as planned in your project schedule. Go further and refine the budget using customizable personnel cost rates or cost categories on EMDESK. Benefit from being able to organize finances into cost categories with different overhead and funding rates. EMDESK auto-calculates them depending on the cost rate you choose. Easily get the latest information about your budget in one click using custom views, filters, and tags to analyse and fine-tune your resources.
Since it’s difficult to estimate the size and cost of a project, proposal budgets can change over time. EMDESK allows for flexibility and budget changes, assuring that different budget versions are safely stored and versionized, so you can go back to previous budget versions anytime to update and adjust them according to a new strategy.
Remember, such strategic planning will allow you and your stakeholders to use your budget calculation as a baseline for measuring the project performance. This check on how the project is progressing begins as you collect the actual costs once the project starts.
Horizon Europe proposal budget example
Further we illustrate a proposal budget example in EMDESK, which is based on the project work plan in EMDESK.
Budget preparation with partners
After you have drawn up the consortium, you can invite every partner to propose the budget items that would be required in order to perform their part in the activities.
In this example below, Partner 3 SIZ proposes a total budget of € 214,605.00 from their side. The table below provides a breakdown of the partner’s budget calculation amongst activities and cost categories, as well as shows the share of indirect and direct costs.
EMDESK ensures that all budget items fit neatly into one of the defined categories. In this project, we have organised our categories into personnel costs, travel, equipment and subcontracting.
Personnel costs calculation
As personnel costs usually make up the main part of a budget proposal and can be a common field for potential errors, here’s an example of how simple personnel costs are estimated using EMDESK budgeting tool.
The partner sets one or multiple personnel cost rates; either multiple ones per each person or team, or an average cost rate for the whole organization. Below you can see how we have set the rates for Partner 3 in our project. We used Person Month (PM) as the unit of measurement (other options - Person Day and Person Hour) and provided the cost rates for the different job types.
In a next step, the partner can use these rates to plan person-months on the different activities. As in the example, Partner 3 plans to spend 8 PMs by the Director on WP1.
At the end, the partner’s personnel budget calculation should look like the example below.
With the “Participants / Cost Categories” report in EMDESK Analytics you will then be able to get the big picture and see how all partners’ budgets sum up to the project’s total and amongst the cost categories.
But there are plenty of other reports, like the report “Activities / Participants” that will provide us with an overview of the partners’ budgets allocation amongst the activities.
Or the report “Participants / Time” which will show the budget allocation over a defined time.
Now it is time to check if your project budget calculation does not hit any budget constraints and if it is adequately distributed amongst the partners, activities, cost categories and time.
Budget reviews & approvals
With the budgeting tool, you can now break down the budget data using appropriate filter settings to get an idea of how certain budgets build up. Here is an example of all personnel costs from all partners for WP 1.
By checking item by item, you can review and approve or adjust proposed budget items and request changes.
What happens once your project has been successfully approved? What’s next?
Once your project proposal has been approved you can congratulate your success. The great thing about working with EMDESK is that you can seamlessly start implementing your project right away. By continuing to use the EMDESK platform, you’ll be able to manage the project costs against the planned budget that exists in the system.
This article is written by Stefan Detschew, Chief Technology Officer at EMDESK.