By the end of this lesson, you will be able to create and modify project budgets using B&P’s budgeting tool that emulates Excel.
Upon successful completion of this chapter, you will be able to:
§ Create and Modify a Budget
The application’s project budget tool provides an iterative automated process with methods a project manager can use to estimate the burdened costs of work to be done for a customer. The tool emulates an Excel workbook with tabs for the various burden cost pool categories of staff and vendor specified resources that are to be consumed during project execution.
Each tab includes automated methods for accessing staff, vendor accounts and other information necessary for developing resource allocations. Hourly rates, burden factors, project period of performance and available funding are all considered by the tool as per specifications taken from the accounting system. You can load all expected resource allocations and then go through an iterative adjustment process until the burden cost is aligned with funding constraints.
The project budget tool can help project managers establish expectations of performance that reflect funding constraints and help minimize the possibility of cost overruns. For T&M contracts, it can help establish a mix of staff and/or vendor labor resources that meet profit guidelines. The cause of performance deficiencies can be determined by comparing budget versus actual cost. Then corrective actions can be properly determined.
Creating a Budget
§ Click project ID segments from left to right in the list boxes.
§ Budgets should not be created at a rollup level that is higher than the revenue (Funding) level.
§ If a budget is created at a rollup level, then lower level budgets are not allowed unless the rollup level budget and all related EACs are first deleted.
§ To see all of a project’s budgets (Working, Completed, Approved, Versions), click Audit/Modify All Direct Project Budgets B.P.I.2.
Note: To check the status of all the budgets that have been created at various levels of a project, you can also use a Project Budget Status (A.P.T.1 or A.P.S.1) report located in the AOP/Outlook Analysis module.
§ If a project has already started, B&P will have pulled the General Ledger details into the budget tool to populate the worksheets with the latest data.
§ The historical data can be overridden until the budget has been approved.
§ Once the budget is approved, an EAC (Estimate at Completion) can be created, which will include the historical actuals and the ETC data (Estimate to Completion).
§ If a budget has already been created and approved for the project selected, you will be prompted to either create another version of the budget or to open a “read only version of the budget, which opens B.P.A.View BUD.
§ When the tool first opens, the default is set to start with StfHrs (Staff Hours).
§ The worksheets are defined as follows:
§ StfHrs (Staff Hours): On this worksheet input labor hour resources to be expended that account for the entire period-of-performance for the project or task ID.
§ Mtls (Materials): Record the raw cost of vendor materials on this worksheet.
§ Sbks (Subcontractors): Record the raw cost of subcontractor work on this worksheet.
§ MHOth (Material Handling and Other Costs): Specify miscellaneous material handling related costs on this worksheet.
§ Trvl (Travel): Record the raw cost of staff and vendor travel here.
§ Cnslt (Consultants): Record the raw cost of consultant effort on this worksheet.
§ ODCOth (Other Direct Costs): Specify miscellaneous other direct costs that will be burdened with G&A on this worksheet.
§ SbksHrs (Subcontractor Hours): This worksheet is like the subcontractors (Sbks) worksheet, but hours and raw hourly rates are specified.
§ ConsltHrs (Consultant Hours): This worksheet is like the consultant (Conslt) worksheet, but hours and raw hourly rates are specified.
§ Stfescl (Staff Escalations): This worksheet is where you can change the percent of escalation of staff salaries.
§ BrdnCst (Burdened Cost): This worksheet has project information regarding revenue, cost, and profit.
§ During the application installation and data validation process, the general ledger accounts associated with the various categories of direct labor, along with those accounts that keep track of travel and vendor related project resources, are assigned to these tabs so that the overhead, G&A, and material handling burdens can be properly related to each individual staff and vendor resource.
§ Cut: Removes data to the clipboard.
§ Copy: Copies data from the clipboard.
§ Paste: Pastes data from the clipboard.
§ Delete: Allows one row at a time to be deleted.
§ Refresh: Click to save any changes.
§ Moving from tab to tab causes an automatic refresh and data is saved.
§ When Refresh is grayed out, no changes have been detected by the system.
Notes: Record assumptions or other information here that relates to that particular worksheet.
§ Cell Fill: Use this feature to copy information from one cell to multiple cells.
§ Col Fill: Use this feature to copy information from one column to multiple columns.
§ Excel: Click this icon to export the data from the worksheet into Excel.
§ Once in Excel, highlight the data rows you want to manipulate and change the format from Custom to General to successfully import the data back into B&P.
§ The dark column headers on each worksheet in the project budget tool designate unique data that B&P does not allow you to change.
§ Click Complete to move the budget to the next step in the process.
§ When Complete is checked, it lets project budget approvers know the creator of the budget has completed the budget development process.
§ It can then be approved by project managers in B.P.I.2 Audit/Modify All Direct Project Budgets.
§ Click Delete to clear the worksheet, delete the working copy of the budget from the Audit/Modify (B.P.I.2) grid, and close the budget tool.
§ Clicking this will not delete any previously saved data, but will simply clear the working storage area that holds the changes you are in the process of developing.
§ Click Commit to save the latest data input.
§ Clicking this saves the contents of the working storage area to the budget data stores that are used for reporting purposes. It will then clear out the working storage for the project/task you are working on, and close the project budget tool.
§ Once committed, budget data appears in reports.
§ Once committed and approved, an EAC can be created.
Note: To see a flow chart of how the Delete/Commit/Close process works for Project Budgets and EACs, check the Appendix.
§ Click Close to close the project budget tool and leave the contents for the project/task you are working on undisturbed for further fine tuning.
§ Click Clipboard Disabled to toggle between enabling or disabling the use of the clipboard where you can collect and paste multiple items.
§ It must be enabled to copy into and out of MS Excel and B&P.
Inputting Data on the StfHrs Tab
§ Global generic staff is provided by the B&P administrator based upon management specifications.
§ User specific generic staff that are shared appear in the drop-down list by default.
§ The rate displayed is the raw cost rate for generic staff.
§ Check Display All and then Refresh to see a list of global generic staff.
Any project manager who has been granted the rights can create generic staff.
Note: You cannot delete a generic staff if it has been assigned to a budget.
The raw hourly rate is used to calculate cost.
The PLC rate is used to calculate revenue.
If you select No, then anyone who wants to change the information about the staff will see a message that says: You are not the Owner – View Only.
If you no longer want a particular generic staff to be used or appear in the drop-down list, input an N.
§ The new generic staff will appear at the bottom of the Add Generic Staff list.
§ There are two types of generic staff:
§ Global generic staff can only be created by your company B&P administrator, but are available to all B&P users based on user security settings.
§ User specific generic staff can be shared based on other user’s security settings or reserved as private to the creator.
§ Once created, if a generic staff is assigned to a project budget, EAC, proposal or non-backlog budget, it cannot be deleted.
§ The average rate displayed is the hourly rate of the individual.
§ This list is taken from the employee master data of your company’s accounting system and includes default settings that are applied in the Organization and GL Account columns.
§ It is limited to currently active employees.
§ For contracts with a work force established in your accounting system, only members of the work force appear.
Checking an employee’s schedule confirms their availability during the time frame needed.
§ This choice should reflect the organization that owns the employee at the time of the charge.
§ For non-labor resources, the default is the organization that owns the project.
This is generally used to override the default G/L Account assignment at the time the resource is added to the worksheet.
§ For T&M contracts, this will contain codes that have already been set up in the accounting system.
§ PLC rates are used to calculate revenue.
§ Use Cell Fill or Col Fill to make input easy.
§ Use a separate line for each unique combination of Emp ID, Name, Org ID, Acct ID, PLC, andHour Rate.
Inputting Data on the Matls Tab
§ The vendor list from your accounting system is replicated in the B&P database and is available for selection in this drop-down list.
§ Selecting a vendor from the list will facilitate the match-up of historical cost and future cost in the EAC process.
§ Highlight a name to add it to the matrix.
§ Use Cell Fill or Col Fill to make input easy.
§ Uncheck the box in the Revenue column for any individual resource where you don’t want revenue calculated.
Inputting Data on the Sbks Tab
§ Add Vendor: The vendor list from your accounting system is replicated in the B&P database and is available for selection in this drop-down list.
§ Selecting a vendor from the list will facilitate the match-up of historical cost and future cost in the EAC process.
Note: To understand how B&P handles historical subcontractor and/or consulting hours and fees, check the Appendix.
§ Highlight a name to add it to the matrix.
§ Input the expenses for the period of performance for the added vendor.
§ Use Cell Fill or Col Fill to make input easy.
§ Uncheck the box in the Revenue column for any individual resource where you don’t want revenue calculated.
Inputting Data on the MHoth Tab
§ Use Cell Fill or Col Fill to make input easy.
§ Uncheck the box in the Revenue column for any individual resource where you don’t want revenue calculated.
Inputting Data on the Trvl Tab
§ Generic Staff Travel is provided by the B&P administrator based upon management specifications.
§ Check Display All and then Refresh to see the list of global generic staff.
§ Only user specific generic staff that are shared appear in the drop-down list by default.
Uncheck the box in the Revenue column for any individual resource where you don’t want revenue calculated.
Inputting Data on the Cnslt Tab
Note: To understand how B&P handles historical subcontractor and/or consulting hours and fees, check the Appendix
Uncheck the box in the Revenue column for any individual resource where you don’t want revenue calculated.
Inputting Data on the SbksHrs Tab
If a PLC is not assigned, the subcontractor’s billable rate and associated revenue will be zero.
§ The hourly rate supplied is the raw cost of the subcontractor’s work.
§ Uncheck the box in the Revenue column for any individual resource where you don’t want revenue calculated.
Inputting Data on the ConsltHrs Tab
If a PLC is not assigned, the consultant’s billable rate and associated revenue will be zero.
§ The hourly rate supplied is the raw cost of the consultant’s work.
§ Uncheck the box in the Revenue column for any individual resource where you don’t want revenue calculated.
Applying Escalations to Resources
§ Highlight the specific period where the escalation will occur and input the new amount.
§ Use the Cell Fill option to copy the percentage to appropriate future periods.
§ How escalations are applied is determined upon the initial installation of B&P.
§ If you are creating a budget for a project that has already started, B&P first looks at the resource salaries at the beginning of the project, as well as the specified escalation factors for each resource.
§ Based on the adjustments and periods already specified, it then takes the new escalation factor you input, and applies it to all resources from the beginning of the project, regardless of how much time has passed.
§ The escalation percentage must be greater than .5% and less than 15%.
§ An escalation factor of 1.00 is telling B&P to use the employee’s current salary for all calculations.
§ You can input discreet escalation adjustments for any individual employee, after the global application of escalation.
Note: To read a more detailed explanation about how escalation works in B&P, check the Appendix.
Viewing Fully Burdened Costs
§ The worksheet shows fully burdened costs by resource sorted by overhead pool.
§ If any resources resolve to an overhead pool labeled 0, then the account/org. combination is absent from the pool/base setup in the accounting system.
§ Once the resources have resolved to the correct overhead pools, the burdened costs tab will resolve every staff or vendor resource specified in each of the other tabs in the budget tool to its appropriate pool showing its fully burdened cost.
§ All labor pools include G&A in their resource cost figures.
§ If funding has been distributed to the project/task ID, then it is compared to the total cost of the project budget.
§ The worksheet has information clearly labeled at the top.
§ Revenue: Funded, Budget, Unspecified
§ Cost: Funded, Budget, Unspecified
§ Profit: Funded, Percent, Budget, Percent, T&M
§ This information is brought into B&P from the accounting system’s billing/revenue setup details, but can be changed here by selecting the Override Settings checkbox.
§ When that box is unchecked, the information becomes read only.
§ There is a warning message at the top of the setup window saying that all versions of this project will share the same Revenue Setup and PLC Setup information.
You will see a Save Complete message.
Any categories that are not editable are coming directly from your accounting system
B&P adds PLCs that are not currently listed.
§ The Hours section of the report provides relevant details from the lower section associated with T&M/PLC rates/categories.
§ The columns include Burdened Cost, Revenue and Profit.
§ When you open a committed budget (complete or incomplete), B&P makes a copy of the committed budget in the working tables, keeping the previously committed version in the permanent or reporting tables.
§ If you click Close to close the project budget tool, the working copy of the budget will not be deleted from the working tables and it remains listed in the audit/modify grid as a working copy.
§ If you click Delete instead of Close, the project budget tool will close, delete the working table copy and the working copy will not appear in the audit/modify grid.
§ If you make changes to a working copy of a budget and recommit it, (it can be complete or incomplete) the project budget tool will close, delete the working table copy and the working copy will not appear in the audit/modify grid.
§ If you approve a committed, complete budget, and try to create a new one for that same project, you have to do one of the following: delete the approved version, unapprove the approved version, or create a new version of the approved budget.
Note: To see a flow chart of how the Delete/Commit/Close process works for Project Budgets and EACs, check the Appendix.
Modify a Budget
Step |
Action |
Data/Result |
1 |
Select a module and context. |
§ Budget Development § Project |
2 |
Select a project in project navigation and click the project ID segments from left to right. |
Selects a project at the lowest level. |
3 |
Select a report in Reports & Actions. |
BPI1: Create/Modify Budget for a Direct Project |
4 |
Enter data in the Employee Hours worksheet. |
§ Add Generic Staff: choose one from the list. § Change the ORG. § Change the GL Account. § Change the PLC. |
5 |
Enter hours for 5 Periods. |
34 hours |
6 |
Click Refresh and then click the Mtls tab. |
Saves the data and opens the Material Expenses worksheet. |
7 |
Enter data in the Material Expenses worksheet. |
§ Add a Vendor. § Change the GL Account. |
8 |
Enter expenses for 5 periods. |
$250 |
9 |
Click Refresh and then click the Sbks tab. |
Saves the data and opens the Subcontractor Fees worksheet. |
10 |
Enter data in the Subcontractor Fees worksheet. |
§ Add a Vendor. § Change the GL Account. |
11 |
Enter fees for 5 periods. |
$150 |
12 |
Click Refresh and then click the MHOth tab. |
Saves the data and opens the Other Material/Subcontractor Expenses worksheet. |
13 |
Enter data in the Other Material/Subcontractor Expenses worksheet. |
Add a Vendor. |
14 |
Enter expenses for 5 periods. |
$100 |
15 |
Click Refresh and then click the Trvl tab. |
Saves the data and opens the Travel worksheet. |
16 |
Enter data in the Travel Expenses worksheet. |
§ Add an Employee Travel. § Change the GL Account. |
17 |
Enter travel expenses for 5 periods. |
$1400 |
18 |
Click Refresh and then click the Cnslt tab. |
Saves the data and opens the Consultant worksheet. |
19 |
Enter data on the Consultant Fees/Expenses worksheet. |
§ Add a Vendor. § Change the GL Account. |
20 |
Enter fees for 5 periods. |
$200 |
21 |
Click Refresh and then click the ODCOth tab. |
Saves the data and opens the Other Direct Costs worksheet. |
22 |
Enter data in the Other Direct Costs worksheet. |
§ Add a Vendor. § Change the GL Account. |
23 |
Enter costs for 5 periods. |
$250 |
24 |
Click Refresh and then click the SbksHrs tab. |
Saves the data and opens the T&M Subcontractor Hours worksheet. |
25 |
Enter data in the T&M Subcontractors worksheet. |
§ Add a Subcontractor. § Add a PLC. |
26 |
Enter hours for 5 periods. |
20 |
27 |
Click Refresh and then click the ConsltHrs tab. |
Saves the data and opens the T&M Consultant Hours worksheet. |
28 |
Enter data on the T&M Consultant Hours worksheet. |
Add a Consultant. Add a PLC. |
29 |
Enter hours for 5 periods. |
15 |
30 |
Click Refresh and then click the Stfescl tab. |
Saves the data and opens the Escalation worksheet. |
31 |
Enter data on the Percent Escalation worksheet. |
§ Enter an escalation that will impact all employees: 5% § Input a new escalation for the employee on line 8 in one period: 10% |
32 |
Click Refresh and then click the BrdnCst tab. |
Saves the data and opens the Burdened Costs worksheet. |
33 |
Check new data entries. |
|
34 |
Click Refresh, Complete, and Commit. |
Enables the budget to now be approved. |