Defining Budgets 155
Establishing Budgets
Display Project Details by clicking the Display Options bar and choosing Show on Bottom, Project Details.
You can establish budget estimates at the planning stage, then refine them as projects progress. Document budget changes as they occur, and then use these changes to calculate the latest budgeted amounts for the project. You can also record monthly spending of budgeted funds, track the current and undistributed variance amounts, and roll up the monthly spending plan of each project in a branch to its higher EPS nodes.
Set up the total budget for each EPS node in the hierarchy first, then enter the applicable portion of the total budgeted amount to each project in the node’s branch. Once these initial total amounts are entered, you can start apportioning anticipated monthly spending amounts per project. The module then tallies the amounts for the projects so you can keep track of the total spending plan and assess the variance between this total and the current budget. This process is ongoing through the project life cycle. Close to the completion of the project, you can better determine profitability and enter the ROI. This amount can be used as a gauge when determining whether a project of this type should be undertaken in the future.
Establish budgets Choose Enterprise, Projects, to open the Projects window. (If you already set budget estimates for nodes and projects, open the WBS window to enter budgets for the WBS levels in your projects.) Click the Budget Log tab for the selected node/project (or WBS element). Enter the total budgeted amount you anticipate for this project in the Original Budget field.
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156 Part 2: Structuring Projects
Enter the total estimated budget amount for the selected EPS node or project.
After you have entered budgeted totals for a node and its projects, you can start apportioning anticipated monthly spending amounts for each of the projects in the branch. Read the next section for more information.
Primavera - Project Management
Defining Budgets 157
Establishing a Monthly Spending Plan
You can distribute the budget monthly for each EPS node and project to create a spending plan. The Spending Plan tab also totals the spending plans of lower levels of the EPS on a monthly basis so you can compare how much you distributed at a high level to how much was actually distributed at lower levels. In the following example, at the EPS node level Assembly, the spending plan for 01MAY is $150,000. The combined spending plans of Assembly’s projects (AUTO and CONV) is $160,000. Because this amount is $10,000 more than was planned, it appears in red ($10,000) in the Undistributed Current Variance column.
Monthly spending plan of levels |
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beneath the EPS node selected |
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node’s monthly spending and that |
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of its projects’ tallies. |
Enter monthly spending amounts at the EPS level Click the Spending Plan tab in the Projects window for a selected EPS node or project. Enter total expenditures for each month in the Spending Plan column. The Spending Plan Tally column shows any amounts previously recorded for project spending plans.
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158 Part 2: Structuring Projects
You can also use the Spending Plan tab to establish a monthly benefit plan. This plan helps you track the financial benefit of performing the projects on a monthly basis. Enter the benefit amount, or profit return on your monthly spending, in the Benefit Plan column. The module also tallies the benefit plans for the combined project amounts in a selected EPS node branch.
Primavera - Project Management