Budget, committed and actual by item
You will be able to: Define actual, committed, estimate to complete, forecast and variance as Zeyto Construction & Contracting computes them; Compute the five numbers for an item and a cost nature; Explain why the totals can hide a nature that is overrunning.
- Read not done yet
- Watched not done yet
- Self-check: not taken not done yet
- Lesson complete not done yet
Every project cost is posted to a leaf item of the breakdown, and every account that carries project cost belongs to a cost nature: material, own labour, machines, subcontract, third-party manpower or other. The cost control view reads those postings and the open orders, and shows five numbers for each item and each nature. Nothing is typed over the ledger; the figures are read.
Show transcript
1. The Portfolio shows the worst of six checks for each project 2. Finance Hub: the money view of all projects 3. Profitability: every project side by side 4. WIP and revenue: earned against billed 5. Cash forecast: the next 13 weeks 6. Month-end close: the checklist before locking the books 7. Cost to Complete report: the forecast final cost 8. Approvals: records waiting for a decision
| Number | Meaning in Zeyto Construction & Contracting |
|---|---|
| Budget | The amount in the current approved budget version for that item and nature |
| Committed | What is on order and still open: purchase orders for materials and open subcontract value |
| Actual | Ledger debits less credits tagged to the item and nature, up to the date you choose |
| Estimate to complete (ETC) | Budget x (1 - item progress %) less committed, never below zero |
| Forecast | Actual + committed + ETC |
| Variance | Budget - forecast; negative means an overrun |
Progress is one percentage per item, taken from approved progress entries only, and the same percentage is applied to every nature of the item. Stock in the site store is not cost until it is issued to an item, so a delivery alone does not move actual.
Together the item has budget 170,000, forecast 181,000 and variance -11,000 (-6.47%). The material saving of 2,000 hides most of the subcontract overrun of 12,000 in a combined view, which is why the control view lists nature by nature and why the Cost to Complete report has one row per nature.
Walk it through
- Compute the five numbers for a nature of your own at 60% progress.
- Explain to a colleague why ETC is never negative.
- In the demo, open a project's Finance tab and find the cost control table by nature.
Public demo company, sign in as admin / demoAdmin123. Data refreshes nightly.
- Forecast = actual + committed + ETC; variance = budget - forecast.
- ETC = budget x (1 - progress) - committed, floored at zero.
- Read nature by nature; totals hide overruns.
Check yourself
4 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.