Understanding project budgeting

This explains the budgeting features available in the Project Accounting module. Use it to help you to decide whether or not you will use budgeting.

You select which levels of the project structure you want to record budgets against, and whether you want to record budgets for cost and/or revenue items.

Once you have set up your budgets, you can enter revised budgets for jobs that are subject to change, and track changes from the original budget values. Any budget analysis produced will automatically use the revised budget rather than the original.

Your budgets are totalled and carried forward, up each level in the project structure. For example, if you use project item budgets, these are added together to create the budget for the relevant group level. You cannot enter a budget at both levels.

You do not have to set a budget for each level of your project structure. You can choose to set a budget at project item level for one section of your project, and at grouping level for another section of the same project.

Total and period budgets

Budgets can be entered as a total amount or as an amount per accounting period.

You can specify your budgets when:

  • You enter the Cost & Charges for your group, or project item.

    This becomes the default budget for each group or project item. This budget is automatically applied when you add that group or project item, to your project.

    You can also enter your budgets as a value per quantity. If you amend the quantity in the project the value is multiplied by that amount.

  • You create or amend your projects.

    You can enter the overall budget quantity and value here.

You specify period budgets when you create or amend your project. You cannot set default period budgets. You enter the quantity and value for each relevant period.

You can use total budgets and period budgets at different levels in the same project. This affects how the budget figures are calculated in your reports and enquiries. In these circumstances, the reports and enquiries may display period budget figures differently.

If you are using total and period budgets in a single project, and you produce a report or enquiry for a specified period, the budget figures are displayed as follows:

  • Reports.

    • The relevant budget for the period is displayed for any project items that have a period budget.
    • The total budget is displayed for project items using total budgets.
    • For group level items using period budgets, the relevant period budgets are totalled for items below the group level in the project structure.
    • For group level items using total budgets, the budgets are totalled for all the items below the group level in the project structure.
  • Enquiries.
    • The relevant budget for the period is displayed for any items that have a period budget.
    • The total budget is displayed for project items using total budgets.
    • For group level items, the total of the budgets displayed on the enquiry for items below the group level in the project structure, is shown. This is regardless of whether the group level is set to use period or total budgets.

You have a project hierarchy as follows:

You have a total budget of £4000 for the Bespoke kitchen item. You have a period budget of £100 per month for five months for the Plumbing item.

Scenario One

You use a total budget at the Phase 1 group level.

If you run a report or enquiry for a single period, the budget figures are calculated as follows:

  Reports Enquiries
Project level Budget Notes Budget Notes
Group - Phase 1 prep 4500 This is the total of all budgets, for all periods, entered for items below the group level. 4100 This shows the total of the budgets displayed on the enquiry for items below this level.
Item -Bespoke Kitchen 4000 As this item does not have a period budget, the total budget is displayed. 4000 As this item does not have a period budget, the total budget is displayed.
Item - Plumbing 100 As this item uses period budgets, the budget for the specified period is displayed 100 As this item uses period budgets, the budget for the specified period is displayed.

Scenario Two

You use a period budget at the Phase 1 group level.

If you run a report or enquiry for a single period, the budgets are calculated as follows:

  Reports Enquiries
Project level Budget Notes Budget Notes
Group - Phase 1 prep 100 As this level has been set to use period budgets, the total of the period budgets entered for items below this level is displayed for the specified period. 4100 This shows the total of the budgets displayed on the enquiry for items below this level.
Item -Bespoke Kitchen 4000 As this item does not have a period budget, the total budget is displayed. 4000 As this item does not have a period budget, the total budget is displayed.
Item - Plumbing 100 As this item uses period budgets, the budget for the specified period is displayed. 100 As this item uses period budgets, the budget for the specified period is displayed.

To set up and enter budgets for your projects

  1. Project Accounting settings

    Choose whether you want to record and budgets for all your projects. Once selected, choose the type of budgets that you want to use for all your projects.

    Choose whether to use cost and/or revenue budgets and whether you want to set budgets for the whole project, groups, or project items.

    Once selected here, the Display and track budget options are available on the Display Features tab when creating Project Item Types, Grouping Levels and Project Levels in the Project Structure settings.

    Open: Project Accounting > Utilities > System Setup > Project Accounting Settings | Features.

    1. Choose whether to use budgets with your projects:

      Record and track project budgeting

      Select this if you want to enter budgets for your projects.

      To choose the type and the level of your budgets, click Settings

      This setting can be changed at any time.

      If this options is cleared, previously entered budget figures are hidden, not removed. Budget figures cannot be amended or new budgets entered.

      The budget figures will be available if you select the option again.

    2. Select Settings and choose the type of budgets you want to use:

      Record and track cost budgets.

      Select this to allow cost budgets to be recorded and analysed.

      Record and track revenue budgets.

      Select this to allow revenue budgets to be recorded and analysed.

      These settings can be changed at any time.

      If these options are cleared, previously entered budget figures are hidden, not removed. Budget figures cannot be amended or new budgets entered. The budget figures are still displayed on the Cost Analysis and Revenue Analysis Enquiry screens.

    3. Choose the level of budgeting required:

      Project only budgets

      Select this to set budgets at a project level only.

      Once selected, you cannot set budgets for a group or project item.

      Project and group budgets

      Select this to set budgets at a project or group level.

      Once selected, you cannot set budgets for a project item.

      Project, group and project item budgets

      Select this to set budgets at a project, group or project item level.

      Note: If you have already set budgets for groups or project items, you may not be able to change this setting.

      These settings cannot be changed once budget figures have been entered for any project.

  2. Project Structure settings

    Choose whether to record and track cost budgets and/or revenue budgets for each Project Level, Project Item Type and Grouping Level in the Project Structure settings.

    Once selected here, the cost and/or revenue budget options are available when creating project items and groups.

    Open: Project Accounting > Utilities > System Setup > Project Structure Settings.

    To record budgets for your project items, grouping levels or project levels, select each item or level and choose the following as required:

    1. Select the Display Features tab.

    2. To use cost budgets, select Display Costing information > Display and Track Cost Budgets.

    3. To use revenue budgets, select Display Costing information > Display and Track Revenue Budgets.

  3. Project Items and Groups.

    Set the default budget quantity and value for cost and/or revenue budgets for each project item and group.

    Once entered here, these default values are applied each time the project item or group is added to a project's structure.

    Open: Project Accounting > Project Maintenance > Project Items and Groups.

    1. Choose the required project item or group, and click Edit.
    2. Select the Costs and Charges tab.

    3. Enter the Budgets information.

      Cost Qty

      Cost value

      If required, enter the default cost quantity and cost value budget for this item.

      Revenue Qty

      Revenue Value

      If required, enter the default revenue quantity and revenue value budget for this item.

  4. Projects.

    Enter the required budget values for individual projects. The project values can be entered at project, group or project item level, depending on the options chosen in the Project Accounting settings.

    You also choose here whether to use total or period budgets.

    Open: Project Accounting > Projects > Amend Project.

    1. Select a project, group or project item from the structure.

    2. Select the Costs & Charges tab. Enter or amend the required information:

      Cost Qty

      Cost value

      If required, enter the cost quantity and cost value budget for this item.

      Revenue Qty

      Revenue Value

      If required, enter the revenue quantity and revenue value budget for this item.

      Override sub item cost budgets

      Select this if you want to set the cost budgets at this project or group level.

      All cost budgets from all projects, groups and project items below this level in the hierarchy are cleared.
      Override sub item revenue budgets

      Select this if you want set the revenue budgets at this project or group level.

      All revenue budgets from all projects, groups and project items below this level in the hierarchy are cleared.

      Use budgets by period

      Budgets by period

      Select this to use period budgets.

      1. To enter the period budget values, click Budgets by Period.
      2. Enter the Cost Qty, Cost value, Revenue Qty and the Revenue value, for the required periods.
      3. Click OK.

      Once you have entered period budgets, you cannot enter total budget quantities and values for the same item.

      Note: If you have entered period budgets and then clear the Use budgets by period option, the period budget values are removed.

      View history

      Select this to view any changes to the budget values, including the date and the user who made the change.
See also

Other tasks

Project Accounting settings

Define project levels

Define grouping levels

Define project item types

Set up project groups

Set up project items

Enter or amend project details