Back to V300: Project Accounting for Construction

Lesson 18: Forecasting Budget

Part 5: Project Budgets

This lesson describes how to create project budget forecasts and compare these forecasts with the actual project

costs and income for each financial period.

Budget Forecasts: General Information

You prepare a budget forecast for a long-term project if you need to break down the structure of the project budget by financial period. This gives you the ability to compare and analyze monthly budgets versus actual revenue and expenditures.

Learning Objectives

In this lesson, you will learn how to do the following:

Create a budget forecast for a project
Add financial periods to the budget forecast
Distribute budgeted values among the financial periods
Update the project budget based on the forecast
Update the financial periods in the forecast based on the updated actual values

Applicable Scenarios

You create a budget forecast for a project if you need to break down the budget structure by financial periods to be able to control the budget performance by periods.

Creation of the Project Budget Forecast

Each project can have multiple revisions of the budget forecast. For a new project budget forecast, in the Summary area of the Project Budget Forecast (PM209600) form, you select the project and enter an alphanumeric revision identifier of the budget forecast, which must be unique within the project. When you enter the revision, the system automatically fills in the table with the revenue and cost budget lines of the selected project. In a forecast revision, you distribute the original and revised budget amounts of existing revenue and cost budget lines among the financial periods in the selected range to estimate planned project revenue and expenses by these periods. You can manually add financial periods for a selected budget line of the forecast revision by clicking Add Periods on the table toolbar and selecting the range of financial periods in the Add Periods dialog box. You can also make the system automatically add financial periods for all the project budget lines of the forecast revision listed in the table according to the selection criteria specified in the Summary area. When you click Generate Periods on the form toolbar, for each line that is currently listed in the table, the system adds financial periods based on the settings of the project task and related project transactions. For more information on how the system determines the range of periods to be added, see Project Budget Forecasts: Generation of Periods. Each financial period added for a project budget line of the forecast revision has quantities and amounts of zero. You can manually specify the Original Budgeted Quantity, Original Budgeted Amount, Revised Budgeted Quantity, and Revised Budgeted Amount values for each period of the project budget line. You can also distribute the original and revised quantities and amounts of project budget lines among period lines automatically by clicking Generate Forecast on the form toolbar. In the Generate Forecast dialog box, you specify which values the system should distribute, in which columns, and for which budget lines. The distribution function rounds equally distributed values by using the logarithmic rounding algorithm. For an example of rounding, see Project Budget Forecasts: Example of Rounding.

For each project budget line with added period lines, the system calculates the following totals in the Original Budgeted Quantity, Original Budgeted Amount, Revised Budgeted Quantity, and Revised Budgeted Amount columns:

Total: The total of the period lines
Delta: The diﬀerence between the value of the project budget line and the total of the period lines

Processing Project Budget Forecasts

When the actual values of a project are updated, the system automatically updates the actual values of the budget forecasts of the project. The system calculates the diﬀerences between the revised budgeted values and the actual values in the Revised Quantity - Actual Quantity and Revised Amount - Actual Amount columns on the Project Budget Forecast (PM209600) form, so that you can compare the performance of each budget line by period.

If you need to update financial periods of a project budget line of the forecast revision, you click this line in the table on the Project Budget Forecast form, and on the table toolbar, click Update Forecast Lines. For the selected line, the system adds the financial periods to which actual values or change order values have been posted for the corresponding project budget line and that have been missed in the forecast revision. If you need to update the original and revised budgeted values of the corresponding project budget line on the Projects form with the delta values of a project budget line of the forecast revision, you click this line of the forecast revision in the table on the Project Budget Forecast form, and on the table toolbar, click Update Project Budget Line. You can restructure the budget of the project and delete the project budget lines for which the corresponding forecast lines have been created. The changes in the project budget structure aﬀect the project budget forecast as follows:

If you delete a project budget line, the corresponding budget forecast lines are not deleted. The system will keep the forecast, and if you restore this project budget line, the forecast for this line will be also restored.
If you delete a project task along with all the cost budget lines that include this project task, the corresponding budget forecast lines are deleted.

Budget Forecasts: To Prepare a Budget Forecast

This activity will walk you through the process of working with a project budget forecast in a construction project.

Story

Suppose that the ToadGreen project estimator wants to prepare a budget forecast to be able to compare and analyze monthly budgets versus actual costs broken down by period. Because some work on interior lighting will be performed for the project in May and June of 2025, the project estimator wants to distribute the total lighting budget across the periods when this work is going to be performed. Also suppose that the work performed in June will cost an additional $5,000 that had not been planned in the project budget. Acting as the project estimator, you will prepare a budget forecast for further review and analysis of budget performance.

Configuration Overview

In the U100 dataset, the following tasks have been performed to support this activity:

On the Account Groups (PM201000) form, the SUBCON account group has been created.
On the Projects (PM301000) form, the ITALIAN project has been created with multiple project tasks, including 16 - ELECTRICAL. Also, on the Cost Budgets tab, the cost budget is defined for the line with the 16-510 cost code and the SUBCON account group for this project.
On the Vendors (AP303000) form, the HOMEDEP vendor has been added.

Process Overview

To track the changes in the project budget forecast, you will create the first revision of the budget forecast on
the Project Budget Forecast (PM209600) form. Then you will generate periods and distribute budget amounts
across these periods. Finally, you will update the project budget and review the budgeted amounts on the Projects
(PM301000) form.

System Preparation

To prepare to perform the instructions of this activity, do the following:

Sign in to the company as the project estimator by using the wendell username and the 123 password.
In the info area, in the upper-right corner of the top pane of the Acumatica ERP screen, make sure that the business date in your system is set to today’s date. For simplicity, in this activity, you will create and process all documents in the system on this business date.
Open the Enable/Disable Features (CS100000) form, and on the form toolbar, click Modify.
In the Projects group of features, select the Budget Forecast check box.
On the form toolbar, click Enable.

Step 1: Creating the First Revision of the Project Budget Forecast Prepare a budget forecast by doing the following

On the Projects (PM301000) form, open the ITALIAN project.
On the More menu (under Budget Operations), click Project Budget Forecast. The system opens the Project Budget Forecast (PM209600) form with the ITALIAN project selected in the Summary area.
In the Summary area, in the Revision box, type 1, and press Enter. The system displays a list of project tasks in the table.
In the Description box, type 2025 Budget Forecast.
On the form toolbar, click Save to save the budget forecast revision, and click Generate Periods. The system adds periods to each budget line, along with the Total and Delta lines.
Save the budget forecast.
In the Summary area, specify the following settings:

Account Group: SUBCON
Cost Code: 16-510 The system filters the budget lines and displays the only line that matches the selection criteria you have specified.

Click the line with the 04-2025 period, and on the table toolbar, click Delete Row.
Click Save on the form toolbar. 10.On the table toolbar, click Add Periods. The system opens the Add Periods dialog box. 11.In the Period From box, select 05-2025. 12.In the Period From box and the Period To box, specify 06-2025. 13.Click OK. The system adds the line for the 05-2025 and 06-2025 periods to the forecast. 14.Click Save on the form toolbar.

Step 2: Distributing Amounts Across the Periods Distribute the budget amounts by doing the following:

While you are still viewing the project budget forecast on the Project Budget Forecast (PM209600) form, on the form toolbar, click Generate Forecast.
In the Generate Forecast dialog box, leave the default values, and click OK. The system distributes the amount so that for the 05-2025 and 06-2025 periods, the Original Budgeted Amount is now 15,000.
Save the forecast.
In the Original Budgeted Amount and Revised Budgeted Amount columns, for the 05-2025 period, change the specified values to 20000.00. Notice that the Delta line has appeared in the table with the -5000 amount specified; the total in the Original Budgeted Amount and Revised Budgeted Amount columns is now 35,000.00.
Save the forecast.
On the table toolbar, click Update Project Budget Line. The Delta line has disappeared from the budget forecast, and the budget forecast should look as shown in the following screenshot. The system has updated the cost budget of the ITALIAN project with the Total value ($35,000) for this line.
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   Figure: Budget forecast for the Lighting - Interior line
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Save the forecast.
On the Projects (PM301000) form, open the ITALIAN project. On the Cost Budget tab, notice that in the line with the 16-510 cost code and the SUBCON account group, the value in the Original Budgeted Amount and Revised Budgeted Amount boxes has been updated and is now 35,000.00.
You have prepared a forecast revision and updated the project budget with the forecasted values. Part 5: Project Budgets | 115