all articles

Project Management 101: Why Use Estimated Hours?

date icon

Featured image

Before we start talking about Estimated Hours, we should first discuss Actual Hours. So if you have never tracked time spent on jobs, the whole concept of estimated hours is probably quite foreign to you.

So let’s start with some definitions...

Estimated Hours – the amount of time you think it’s going to take someone to complete a task or a project.

Actual Hours – the real amount of time it took to finish that task or project.

Estimated Hours vs. Estimated Duration

Keep in mind that Estimated and Actual hours should not be confused with Estimated or Actual Duration. The latter is the number of calendar days that were planned/spent on a task.
Because people are usually working on multiple tasks at any given time, it’s quite common to see a situation when a task takes 3 days to complete (actual duration), but requires less than 8 hours of actual efforts (actual hours).

In order to know the actual hours spent on a task, one should track their time. There are various ways and different tools to track time and we’ll certainly cover this topic in the future. But for now, let’s assume that you and your team have been recording your time religiously. That’s where Estimated Hours come into play and bring lots of benefits to you as a project manager. Here are the top 3...

Discover Time Management Tool for Accurate Time Logging
Learn More

Benefit #1: Preventing going over a budget

During the planning phase please make sure that your team provides estimated hours for each and every task in your project. Then you’ll be able to compare those numbers against a running summary of the actual hours spent by your team and easily detect any possible budget overrun.

Benefit #2: Earned Value AnalysisEarned Value Analysis on Dashboard

A more advanced way to monitor your project health is to use a method called Earned Value Analysis (EVA). It takes into account your project progress, estimated hours, and actual hours and provides you with a visual indication of your project performance.

Benefit #3: Historical Data for Future Planning

The history of Estimated and Actual Hours for the completed projects is invaluable as a forecasting tool. There are many great use cases for it. Here are just a couple:

  • Sometimes a new project comes along that is similar to what you already dealt with in the past. By reviewing the estimated and actual hours from the previous project you can learn from the past planning mistakes (if any) and provide a more accurate and realistic estimation this time.
  • If you let the team members responsible for the tasks do their own estimation (which, by the way, is a very good practice), after a while you can learn how accurate they are with their estimates and add an appropriate amount of “padding” to their assessments. For some reason it’s always “add” and never “deduct”.

As you can see, using Estimated Hours properly is instrumental to your project success. So go ahead and try this practice with your next project!

The Definitive Guide to Project Resource Management

Questions? Ask away using the comments section below

This post is a part of our on-going  Project Management 101 series.

Follow us

Find Out How Easy Resource and Project Management Can Be!

Related Posts

PM Basics 101PSASoftware Research

Top 7 Tools and Apps for Professional Services Organizations

PM Basics 101Professional ServicesPSA

6 KPIs for Professional Services Firms in 2023

PM Basics 101PSA

Guide to Effective Project Cost Management

Nice! You just took the first step to achieving game-changing results.

To ensure your demo is tailored to your team’s specific needs, we're connecting you with a product specialist to better understand your requirements.

support illustration

Schedule a 30-minute meeting to start your trial

The calendar is loading... Please wait

It’ll take you 8-minutes to see
Birdview PSA features in action:

  • Project Management
  • Financial Management
  • Resource Management
  • Custom Reporting
  • Artificial Intelligence
happy illustration

Nice! You just took the first step
to achieving game-changing results!

Create your account right now. Have a great start with your 14-day trial!

For the best experience please access Birdview PSA from a desktop PC or tablet or download Birdview PSA app at