The budget ran out before the work did.
Separate the questions. First, find out where the time went: compare the actual hours per phase to what you estimated. Then decide whether to absorb the overrun, adjust the remaining phases, or raise it with the client. The answer depends on whether the scope grew or the estimate was wrong.
An overrun is not a scope problem. It is an estimate problem.
Budget overruns and scope creep feel similar because both eat into profitability. But an overrun means the agreed work took longer than expected, while scope creep means work was added outside the agreement.
The distinction matters because they have different fixes. An overrun means the estimate needs revisiting. Scope creep means the agreement needs revisiting. Mixing them up leads to the wrong conversation with the client and the wrong adjustment for the next quote.
How do you spot an overrun before the phase is finished?
Watch the budget health while the work is running. Phased shows three states: On track, Approaching, and Over budget. A phase that reaches Approaching still has room, but the pace of spending suggests it may not be enough.
The effective hourly rate is the earlier signal. It starts at the agreed rate and falls as hours accumulate. If the rate is dropping faster than the work is progressing, the phase is heading toward an overrun even if the budget bar still looks comfortable.
Where did the time go?
Compare the actual hours per phase to what you estimated when you set the price. A phase estimated at 20 hours that has already used 18 with work remaining tells you the estimate was short.
Look at the tasks within the phase. One task taking three times its expected effort is a different problem from every task taking slightly longer. The first might mean the task was underscoped. The second usually means the rate of work on this kind of project is slower than you assumed.
Should you tell the client?
If you quoted a fixed price, the overrun is yours to manage. The client agreed to a price, not to a number of hours. You are not obliged to report that the work took longer than you planned.
There are situations where raising it makes sense: if the remaining phases depend on a decision the client has not made, if the overrun reveals a complexity that will affect later phases, or if you want to renegotiate the price before continuing. The point is that reporting an overrun is a choice, not an obligation.
How do you finish the project without making it worse?
If one phase has already overrun, check the estimates for the remaining phases against what you now know. The same assumptions that produced a short estimate in one phase may apply to the others.
You can adjust a remaining phase’s budget to reflect a more realistic estimate. This changes the health indicator but does not change the price you quoted. It gives you an honest reading for the rest of the project instead of a figure you already know is wrong.
What do you change for the next quote?
Review finished projects and compare estimated hours per phase to actual hours. If concept phases consistently take 30% longer than estimated, the next quote should budget for that.
The effective rate per phase tells you which kinds of work earn above your target and which fall below. A phase type that regularly underperforms is either underpriced or underestimated. Adjusting the next quote is more reliable than trying to work faster on the current one.
What if the overrun is actually scope creep?
Check whether the work that caused the overrun was in the original agreement. If a client asked for something that was not included, that is scope creep, not an estimation error.
Mark those entries Out of scope. The original budget can then show how the estimate is performing without the added work mixed in. The scope creep guide covers the classification and what to do with the marked hours on a client report.
Common questions
Is going over budget the same as scope creep?
No. An overrun means the agreed work used more hours than estimated. Scope creep means work was added that was not in the agreement. An overrun lowers the effective rate on the original scope. Scope creep adds hours that should not count against the original estimate at all.
Does the client see the overrun?
Not unless you choose to share it. Client reports show agreed amounts and hours, not budget health, effective rates, or internal estimates. The overrun is visible only in your own profitability view.
Can I adjust the budget mid-project?
Yes. Changing a phase budget updates the health indicator and effective-rate reading. It does not change the price you quoted. Use it to set a realistic target for the remaining work so the health status gives you useful information instead of a warning you have already accepted.
Is this on the free plan?
Free shows budget health and the effective hourly rate per phase. Pro adds the Analyse page with profitability across all projects and budget performance tables for every budgeted phase. Every account starts with a 30-day Pro trial.