Revisions, transfers, contingency and baselines
You will be able to: Explain how a budget revision differs from a transfer; Describe the schedule baseline and the forecast snapshot; Work out the effect of an approved variation on contract value and budget.
- Read not done yet
- Self-check: not taken not done yet
- Lesson complete not done yet
Projects change. The product handles change by recording it as new versions, never by overwriting. There are three kinds of budget change and one kind of schedule change to know.
| Change | What it does | Approval |
|---|---|---|
| Budget transfer | Moves budget between two items of the same project, total unchanged | Two approvers, neither the creator |
| Budget revision | Changes the project total, for example after an approved variation | Two approvers, neither the creator |
| Contingency drawdown | Moves budget from the project's contingency item to another item; the pool keeps an original, a drawn and a floor amount | A kind of budget transfer: two approvers |
| Schedule baseline | A frozen copy of the plan's dates kept beside the current plan | Taken by the planner; earlier baselines stay |
All budget changes are non-posting: a budget reads the ledger and never writes to it. The approvals use the same engine as other records, so a configured approval matrix for the record type wins over the default of two different non-creators. Company settings can relax the four-eyes rule to one approver, but that is a control decision.
Forecast snapshots
A forecast snapshot freezes budget, committed, actual, estimate to complete, forecast and variance as at a date, for the project and for each item. You take one every month and confirm it; a confirmed snapshot is frozen. Each snapshot splits the variance by cause (price, scope or other). In version 1, quantity and productivity causes are not calculated and fall into other. Comments can be added to a snapshot for the discussion.
Walk it through
- Write one example of each: a transfer, a revision and a contingency drawdown, with amounts.
- Compute the margin of a variation priced at 100,000 with cost 95,000 and its effect on the project margin.
- In the demo, open a project's Finance tab and look at the list of budget changes and the forecast snapshots.
Public demo company, sign in as admin / demoAdmin123. Data refreshes nightly.
- Budget changes are new versions, approved by two people, and never post to the ledger.
- A transfer keeps the total; a revision changes it.
- Forecast snapshots freeze the numbers monthly with a cause split.
Check yourself
5 questions on this lesson. Not timed, not the exam, and you can try again. Score 60% or more, and read the lesson, to complete it.
1. A budget transfer between two items:
2. A forecast snapshot, once confirmed, can still be edited.
3. A variation adds AED 100,000 to the contract and AED 85,000 to the budget. What is the new budget if it was AED 1,700,000?
4. A variation of AED 100,000 costs AED 95,000 to deliver. What is its margin on sell?
5. Which of the following are non-posting (never write to the ledger)?
Select all that apply.