Glossary for Project

The smallest part of the activity structure used for a time-scaled budget. An entity that is used to represent a part of a project in an activity structure.

LN distinguishes these activity types:

  • WBS Element
  • Control Account
  • Work Package
  • Planning Package
  • Milestone
See: activity structure
activity/activity budget
The project budget is an activity budget with the budget control on the activity budget. This means that an activity structure must be filled and that the planning can be used.
activity budget
An activity budget functions in more or less the same way as an element budget whose budget method depends on the way you structure your project.

Advantages of an activity budget over an element budget are:

  • An activity budget is defined on a time horizon.
  • You can use an activity budget for planning purposes in external scheduling packages.
  • You can copy an activity budget to a top-down budget.
  • You can use earned value methods to measure project performance.

You can either create activity budget lines in LN or in external scheduling packages.

activity progress
The progress of an activity.

LN distinguishes two types of activity progress:

  • Physical progress
  • Schedule (time/duration) progress
activity relationship
Activities are sequenced with respect to work and specific dates to provide realistic schedules. An activity relationship indicates that a certain activity (successor) cannot start or end until another activity (predecessor) starts or ends.

You can define the following dependencies between the predecessor and the successor activities:

  • Finish-to-Start
    The initiation of the task of the successor depends upon the completion of the task of the predecessor
  • Finish-to-Finish
    The completion of the task of the successor depends upon the completion of the task of the predecessor
  • Start-to-Start
    The initiation of the task of the successor depends upon the initiation of the task of the predecessor.
  • Start-to-Finish
    The completion of the task of the successor depends upon the initiation of the task of the predecessor.
activity structure
A hierarchical structure that organizes and defines the total scope of the project. Each level represents an increasingly detailed definition of a work project. In contrast to the element structure, the activity structure is activity time oriented.
actual cost
The real costs incurred on a project. These costs are logged in Project Cost Ledger. Example: Inventory Cost, Purchase Invoice Cost, Price Variances, Manual Costs, and so on.
actual value
The costs incurred to accomplish the work performed within a given period.
Abbreviation: AV
In LN, a modification to a frozen bottom-up budget. Modification will only increase or decrease the budget, for extensions the contract is also changed.
advance payment
A way to efficiently manage your cash flow by requesting to pay an agreed amount before the project or a specific part of the project starts. The advance payment will be settled with the final invoice. For example, you can select a project and request an advance payment for certain project materials. The advance can be linked to an installment. For unit rate and cost-plus invoices, the advance payment request is settled with the next invoice(s).
agreement type
A lumpsum contract or a reimbursable contract. In a reimbursable contract the customer agrees to pay all acceptable costs up to a fixed fee.
applied rate
The rate used to calculate the internal overhead costs for the contract or the project. Example, administrative costs.
To make a proportionate division or distribution for the earned value. When activity Y is apportioned to activity X, the earned value method of Y and X is the same. Y will copy X. X can have any earned value method.
archived projects
Projects that are stored in an archive company. The project archive company can be used as a repository for historical project data.
An environment where a product or service can be assembled after receipt of a customer's order.
Abbreviation: ATO
assembly order
An order to assemble a product on one or more assembly lines.
The actual pieces of property, plant, or equipment that are uniquely utilised and used by an organization for a defined life time.
A calculation that determines how many products are available (to sell or consume in a project) at a certain moment in the future.
award fee
An amount paid to the contractor in parts or as one-time payment based on the performance of the contractor.
bank guarantee
A guarantee from the bank ensuring that the liabilities of the business partner are met.
baseline (planning)
The baseline is a snapshot of the active plan's scheduled activities' start and end dates for a specific date and time.
A statement of the price, terms of sale, and a description of goods or services offered by a supplier or contractor to a prospective buyer. The customer data, bid values, and payment terms are contained in the header; the data for the actual goods or services is specified on the bid lines. A bid is usually considered as an offer to sell, when a response is sent to a request for quotation or proposal.
billing cycle
The time interval defined to generate billing statement for the contract.
billing rate
The rate used to calculate the external overhead costs that are billable to the business partner. The billing rate is used to invoice the business partner.
bill of material
A listing of all subassemblies, intermediates, parts, and raw materials that go into the parent assembly. The bill lists the quantity and costs of each component.
Synonym: BOM
bottom-up budget
This budget method defines all work that must be accomplished to complete the budget. A bottom-up budget is made for elements or activities.
The total budget amount of the finished project, activity, or OBS element.
Abbreviation: BAC
budget cost analysis
An analysis of the bottom-up budget. You can run several cost analyses for the same budget. Each budget is stored with a combined project code and budget cost-analysis code, so you can compare the budgets.
budget cost analysis codes by project
Codes by which amounts and time quantities of budget lines are calculated for budget cost analysis.
budget date
The date of a budget line.

This date is used for:

  • Currency conversions that relate to the project. A currency conversion is date-effective. The budget date determines which currency rate is used.
  • Prices. These can also be date-effective. The budget date of a bottom-up budget line determines the price or rate of the cost object.
budgeting method
The way to budget and measure expected productivity.

LN distinguishes two methods in the bottom-up budget:

  • Production Rate: the number of production units produced per unit of time.
  • Labor Norms: the number of hours required to carry out one unit of the cost object.
budget labor-rate search path
A search path that determines which cost and labor sales rates from which sessions are used in labor budget lines: labor, trade group, project. The default labor rate that is used is defined as the level 1 labor rate. If this is not available, level 2 is used, and if this is not available, level 3 is used.
budget line
The most detailed level of a bottom-up budget. The elements or activities in a budget can contain an unlimited number of budget lines. Each budget line includes a quantity of a cost object, a cost component to which the cost object is assigned, and a budget date.
budget-line status
The status of the budget line. The status defaults from the element or activity to which it belongs.

LN distinguishes these statuses:

  • Free: the general data for a budget line has been recorded, and can be changed.
  • Actual: you can still change the budget data and generate the control data. You can also log the budget history.
  • Final: you cannot change the budget data anymore. You can only add or change the budget lines through a budget adjustment. You can also log the actual budget history.
budget status
The budget status of an element or activity.

LN distinguishes these statuses:

  • Free: you can enter and change budget lines.
  • Actual: you can change the budget data and the budget lines. In addition, the control data can be generated and the actual budget history can also be logged.
  • Final: you cannot change the budget data without using budget adjustments.
business sector
An area of commercial endeavor. Projects can be categorized according to the business sector to which they refer.
Abbreviation of Commercial And Government Entity. A unique identifier assigned to suppliers to various government or defense agencies, as well as to government agencies themselves and also various organizations. CAGE codes are used internationally as part of the NATO Codification System (NCS), where they are sometimes called NCAGE codes.
calendar file
A file containing calendar information for one or more calendars.
capital project
A project used for internal use in which deliverables can be booked as fixed asset but delivery of goods to customers is not possible. In a capital project, you are the business partner.
A user-definable classification for projects.
A financial obligation that represents future costs.
connection node
The activity node of the activity structure to which the external scheduling connection is established. The activities connected to the node are used in the external scheduling package. You cannot link an activity to an external scheduling package if the higher or lower level activity of the selected node is used for another project.
An agreement with the business partner that defines the terms and conditions like deliverables, billing plan, payment terms and so on. A contract can be linked to one or more projects.
contract amount
The total amount of the project contract.

For a time-phased budget version, the contract amount is expressed as follows:

contract amount = profit fee + management reserve + distributed budget + undistr. budget

The contract amount is used to determine the invoice limit.

contract deliverable
A contract deliverable is a tangible or intangible item that is produced or purchased as a result of a contract.
contract fee
An amount that is paid as an award or an incentive to the contractor, based on the terms and conditions of the contract.
contract phase
The identification of a stage or a phase during the execution of the contract, for example, bidding, printed, sent to customer, and so on.
control account
The only type of activity that can be linked to an organization breakdown structure. At this level functional responsibility for work and costs can be assigned. You can detail short-span jobs in control accounts and use it for the execution of a project.
control code
A common parent cost-object level, a level above the special cost object.

A control code is used for control purposes. For analysis, you can group cost objects of the same cost type under a control code. If you use a cost object to categorize a group of cost objects, it can be its own control code. You cannot have more than one control code in a tree. This is used for the frozen bottom-up budget.

control data
Data that is used to monitor a project.
cost base assignment
A cost-base assignment is the part of an overhead application base in which the cost-types, cost components or cost objects are defined over which overhead must be calculated.
cost component
A cost component is a collection of cost objects with a certain characteristic. A cost component does not depend on the cost type, therefore, for example, a project can be monitored from another dimension. For example, all the costs that refer to electrical work, for example, cable and installation work, are visible if the applicable cost objects are linked to the cost component Electrical work.
cost control
The method that LN uses to control project costs.

Cost control involves:

  • Recording actual costs against the expected costs entered in the budget.
  • Reporting on any differences between budget, forecast, recorded costs and progress. If an element or activity uses cost control, the expected costs of the individual element as entered in the project budget are carried over to the control budget. If an element or activity does not use cost control, its budgeted costs are aggregated to the next, higher-level element in the budget structure for which cost control is applied.
cost-control periods
In this period project-related costs and revenues are booked.
cost item
An administrative item that represents certain expenses. The item is not a physical product and cannot be handled logistically.
cost object
A type of cost carrier for the resources used in your project.

These cost objects are available:

  • Material
  • Labor
  • Equipment
  • Subcontracting
  • Sundry Costs
  • Overhead

Cost objects can be standard or specific for a project. The cost object is related to a control code for cost controlling purposes.

cost of goods sold
The expense a company incurs in order to manufacture, create, or sell a product. It includes the purchase price of the raw material as well as the expenses of turning it into a product.
Abbreviation: COGS
cost performance index
A measure of cost efficiency on a project.

The cost performance index is determined by measuring the ratio of earned value (EV) to actual costs (AC):


If the result is less than 1.0, cost is greater than budgeted.

If the result is greater than 1.0, cost is less than budgeted.



Abbreviation: CPI
cost plus contract
A contract based on calculation of time and material after parts of the project are finished. Agreement on prices and labor is made before the project starts.
cost-plus contract
A contract that is carried out based on cost reimbursement and a profit percentage.
cost type
A way of categorizing cost objects and control codes according to the nature of the costs that they represent.

LN Project distinguishes these cost types:

  • Materials
  • Labor
  • Equipment
  • Subcontracting
  • Sundry Costs
  • Overhead
cost variance
Any difference between the earned value of an activity and the actual cost of that activity.
Synonym: EV - AC
credit note
The correction form for a (partly) returned purchase or sales order. The credit note states the quantity and value of the goods concerned and the reason for the credit.
DD 250
Abbreviation of DD Form 250 or Material Inspection and Receiving Report.
destination warehouse
The default project warehouse to which goods are sent before they are used in the project.
direct labor
The number of actual hours spent on a task, or a service for the business partner.
discrete lines
Bottom-up estimate lines that are not attached to any primary structure element.
distributed budget
The top-down budget part that is distributed across the activities.

You can look at a distributed budget on various levels:

  • For activities: the distributed budget equals the budget that is already distributed to the lower level activities.
  • For the version: the distributed budget equals the budget assigned to the top activity of the activity structure. This can at most be equal to the sum of the contract amount minus profit fee minus management reserve
document types
A user-definable classification of project-related documents.
Abbreviation of Department of Defense Activity Address Code. A six-position code that has been awarded by the US government to a party involved. When assigned outside the Department of Defense, the codes are usually referred to as AACs or FEDAACs.
Abbreviation of Defense Priorities and Allocation System. DPAS is used to provide priority ratings for contracts related to orders from the US Department of Defense. DPAS-rated orders have higher priority than unrated orders.
earned value
The budget amount based on the project progress for a specific period.
Abbreviation: EV
See: earned value concept
earned value concept
A time-phased method for measuring project performance. It compares the amount of work that was planned with work that was actually accomplished to determine if cost and schedule performance are as planned.

There are a number of different ways in which you can use the earned value method to determine how budget amounts are to be earned:

  • Milestones
    Milestones are attached to the activity and a percentage or amount of the budget is assigned to each milestone. When you reach a milestone, the assigned budget is earned.
  • Start and End Percentage
    Percentage values are assigned to the start and end points of the activities. In other words, the start percentage is earned when the activity starts and the remaining percentage is earned when the activity is completed.
  • Percent Complete
    Budget amounts are earned in proportion to the percentage progress of the activity
  • Level of Effort
    Budget amounts are released in proportion to effort. This method is appropriate for time-driven activities where it is assumed that there will be no discrepancy between scheduled work planned (PV) and work performed (EV).
  • Apportioned
    Apportioned efforts are those which have an intrinsic performance relationship to some other discrete activity. Budget amounts are earned in the same way as for the linked charge.
The smallest part of an element structure. An element is used to define the (structure of the) work of the project, so that you can carry it out.
element/activity budget
The project budget is an element budget, which is linked to activities in order to create a control budget. This means an element and activity structure must be filled and that the planning can be used.
element/element budget
The project budget is an element budget with the budget control on the elements. This means that an element structure must be filled but that planning cannot be used.
element budget
The bottom-up budget or control budget that consists of elements. The alternative is an activity budget. The elements can be related in a multilevel hierarchical structure, and each element can contain cost-object budget lines.

The advantage of an element budget over an activity budget is:

  • Multiple parents makes budgeting easy for repeating work.
  • With the use of frequencies calculation of amounts needed of one element is faster and easier.
element relations
The way to determine the positioning of elements in comparison to other elements. Element relations are the basis of a layered (multilevel) element budget. The elements can also be linked to activities, a relation that is used when you generate control data for an element/activity budget. Elements use frequency as a tool to calculate element amounts fast and can have a multiparent structure.
element structure
The multilevel, multiparent, hierarchical tree-like structure of elements that can be the basis of a budget.
element type
A way to distinguish project elements. A project with a Progress Invoice invoicing method can contain two types of elements: direct and indirect. If the progress is more than 100%, direct elements can have more than 100% progress. Indirect elements can never have more than 100% progress.
A type of cost object representing reusable resources that are not consumed while the project is carried out. Equipment can be purchased (rented or hired) from a third party for the project or internally owned. Example: machinery and tools such as cranes or welding machines .
equipment group
A special equipment cost object that acts as a grouping to other equipment cost objects. This is a useful way of grouping together similar equipment cost objects.
An estimate is the result of a cost engineering process that aims at determining the resources required to accomplish a task. An estimate is done to calculate cost, and/or sales price. You can use multiple methods. For example, a bottom-up or top-down structured. An estimate is also used as the starting point for a bid to a potential customer (internal or external).
estimate at completion
The forecasted total cost of a project, activity, or organization-breakdown-structure element when the defined scope of work is completed. To calculate the estimate at completion: actual costs + estimate to complete
Abbreviation: EAC
estimate line
A detailed estimate breakup. For example, if you require item A for the estimate, you enter this item with its specifications on the estimate line.
estimate series
The estimate series is used to create a unique project number. Organizations can prefer to have separate project ranges for estimating projects or use estimating as a phase of a project and include estimating in the project used for execution.
estimate to complete
A realistic forecast appraisal of the remaining work.
Abbreviation: ETC
estimate type
The way in which the calculation of the estimate is performed. An estimate type is either top down or bottom up.
  • Top Down
    In calculating the cost or sales amount in a top-down structure, you distribute a top amount to the lower level elements.
  • Bottom Up
    In calculating the cost or sales amount in a bottom-up structure, you enter exact amounts for lowest level elements and aggregate them to make the top amount.
estimate version
A means to compare estimates. An estimate can have various versions. Each version is stand-alone and is not derived from the previous version. A version can, however, be copied or compared.
A cost engineering process used to determine an estimate.
exchange-rate type
A way to group currency exchange rates. You can assign different currency exchange rates to different invoice-to business partners and/or to different types of transactions (purchase, sales, and so on).
expense tax
An internal purchase cost that can be booked on a non-finalized project. The transaction costs are posted separately if direct delivery occurs. If a delivery is made through a project warehouse, the expense tax is included in the valuation price or fixed transfer price (FTP).
The specific agreements within or in addition to the initial contract. An extension falls outside the initial contract with the sold-to business partner. Extensions can be assigned to the bottom-up budget.

LN distinguishes four extension types:

  • Scope Change
  • Provisional Amount
  • Fluctuation Settlement
  • Quantities to be Settled
financial result status
A way to characterize the project's financial results.

LN distinguishes three different financial result statuses:

  • Free
    This status applies until the project is finished.
  • Determine Result
    If the project status is Finished, you can select this financial result status.
  • Result Determined
    The final result is determined and the project status is changed to Closed.
fixed-price contract
A contract that is carried out for an agreed fixed price, also called a lump sum.
flow shop
A type of manufacturing organization in which machines and operators handle a standard, usually uninterrupted, material flow. A flow shop is a mass-production shop and has a continuous manufacturing layout.
fluctuation settlement
An extension type. The settlement of the price fluctuations' influence for invoicing purposes. You cannot define this extension type for Cost Plus contracts and for contracts with Invoicing Method set to Unit Rate.
general data
Data that is not project specific. This data includes generic information on business partners, countries, elements, and so on. You can either enter this data in the Project Definition or in LN Common.
general project data
Data that is project specific.

For example:

  • Project cost object
  • Project definition
  • Project wage rates

Enter this data in the Project Definition module.

hard commitment
For a project, a soft commitment becomes a hard commitment when a purchase order is actually received and due for invoicing.
A percentage amount that the customer withholds from the contract amount. This serves as a guarantee that all activities are performed, and that contractual obligations are met. In other words the holdback amount is paid after the project activities have been satisfactorily performed.
hours-control periods
LN uses hours control periods.

LN uses hours control periods to:

  • Carry out periodic control of labor hours
  • Realize hours accounting
  • Process wages and salaries
independent multi currency
This approach is required for companies that work in high-inflation countries.
The amount invoiced to the customer when a project completes its corresponding element/activity or reaches a milestone or progress of elements/activities.
interim financial results
The temporary financial result that you can consult while you carry out the project and which you can transfer to the profit and loss account.

Two interim result types exist:

  • Cost: transactions associated with costs.
  • Revenue: transactions associated with revenues.
internal project
A type of project for which no sold-to business partners are defined and no invoicing is performed. The delivery of items does not apply. An internal project can optionally be capitalized, the value can be sent to the Fixed Assets module in Financials.

LN distinguishes two project types:

  • A capital project: deliverables can be booked as fixed assets, delivery of goods is not possible.
  • An internal project: cannot be booked on the balance, and delivery of goods is not possible. The result is only visible in the profit and loss account.
invoice type
The way to calculate project invoices for a given contract type. The invoice type determines when to issue invoices to the sold-to business partner.

LN distinguishes these invoice types:

  • Cost Plus
    The amount is based on the financial amounts entered at cost object level plus a profit. This method is only available if the contract type is Time & Materials or Cost Reimbursement.
  • Unit Rate
    The amount is based on the financial amounts per unit entered at element or activity level. Unit-rate invoicing applies to both Fixed Price and Time & Materials contract types.
  • Installment
    The invoice amount is a subdivision of the value. This method is only available if the contract type is Fixed Price.
  • Progress Invoice
    The invoice amount is based on progress for element or activity. Two types of elements are allowed: direct and indirect. The calculated amount of the direct elements depends on their own progress. The calculated amount of the indirect elements is based on the progress of the project as a whole and can never be more than 100%.
  • Delivery Based
    Invoicing is based on the sales amounts of the contract deliverables that are linked to the contract shipments.
invoicing method
This method is only used for contract projects to invoice to Financials.

Capital projects have no invoicing. Sales order projects use Invoicing for invoicing.

labor rate for hours registration search path
This search path determines which cost and labor sales rates are used in hours registration.

The search path consists of four levels, each of which you can set to one of these:

  • Employee
  • Labor
  • Project
  • Trade Group
  • Department

The default labor rate used, is level 1. If this level has no entry available, level 2 is used, and so on.

Lag is the modification of a logical relationship that directs a delay in the successor activity. Negative lag or lead allows an acceleration of the successor activity.
The cost amount plus surcharges.
To copy an estimate version to a project budget. The version estimate lines are copied to project budget lines.
leading estimate type
The estimate type of the structural element.
  • If the leading estimate type is bottom up, LN calculates the total leading estimate type (LET) amount by summing up the estimate line amounts with the same level type.
  • If the leading estimate type for the top structural element is top down, the total LET is the structural element amount that is defined as top down. Top-down structural elements are only checked to see whether the estimate amounts do not exceed their parent’s amount; they are not actually used for the total estimate.
Acronym: LET
leaf node
The last particle of a structure. If a child is added to the leaf node in the structure, the leaf node becomes a parent and is called a node.
level of effort
An earned value method in which budget amounts are released in proportion to effort. This method is appropriate for time-driven activities where it is assumed that there is no discrepancy between work planned and work performed.
level type
An estimate type category that determines which estimate lines are used in aggregating totals.
A production environment where a product or service can be made after receipt of a customer's order. The final product is usually a combination of standard items and items custom-designed to meet the special needs of the customer.
Abbreviation: MTO
management reserve
A contingency fund for unanticipated occurrences, which reduces the risk of scope changes. In a time-phased budget version, this is the amount that is withheld for control purposes rather than distributed to the activity structure or retained for profit.

Management reserve is expressed as follows:

management reserve = contract amount - profit fee + distributed budget + undistr. budget
Abbreviation of Military Assistance Program Address Code.
An activity of zero days that usually represents a significant event in the project. In many cases the completion of a phase of major deliverable. Milestones can be used for the moment of invoicing and the calculation of earned value.
mixed model flow
A type of flow shop in which two or more different products are assembled with relative small changes over time and set-up times. The product sequence can vary, for example, A-A-B-C-A-C-B-B-C-A, and so on.
The number of hours required to carry out one unit of labor. Used in an activity budget with cost type Labor, Equipment, or Subcontracting.
Number of hours = number of labor	units * norm 

This norm is useful in situations where the unit of measure for the labor cost object is not a time unit.

order lead time
The time required to obtain a purchased item, subcontract a service, or rent a piece of equipment. This time includes order document preparation, sourcing, and supplier lead time.
organization breakdown structure
A representation of the structure of a project organization, this is usually depicted as a tree-like hierarchical structure. The organization breakdown structure is used to link the responsibilities of certain project parts, such as the allocation of a financial budget or the realization of project activities to an OBS element. Each OBS element can be linked to an employee. The OBS element is standard and can also be made project specific.
Synonym: OBS
Overhead expenses are indirect costs (for example, electricity) that impact all manufacturing costs, except for direct labor and direct material that change depending on production volume.

LN allows you to define three types of overhead costs:

  • Indirect materials
    These are costs that indirectly add up to the total cost of an item, such as light, heat, supervision, and maintenance.
  • Indirect labor
    Indirect costs such as an hour of labor, administration and general meetings.
  • Miscellaneous expenses
    Taxes, insurance, depreciation, repairs and so on.
overhead allocation
Overhead allocation is a process of identifying, aggregating and assigning indirect costs to activities, for which organizations want to separately measure costs. The outcome of the overhead allocation process are the overhead rates. Predetermined overhead rates are assumed to be calculated in Excel by dividing the budgeted or estimated overhead with the budgeted activity and are used to apply overhead.
overhead application base
An overhead application base determines the project for which overhead must be calculated and applied.
An amount paid to the business partner by the contractor, in case the terms of the contractual agreement are not met.
percentage completed
An earned value method in which time-phased budget amounts are released in proportion to the progress of the project in terms of percentage.
The budgeted costs according to the progress at the end of the current period. In most cases, LN calculates the performed as follows: performed = budgeted amount * progress
In Project, a user-defined project subdivision. Typically, a phase consists of a number of project activities leading to a deliverable.
physical progress
The progress in amounts. This is different from percentage completion, which is the progress in time.
Specifies the activity structure, the schedule, and the start and end dates. You can maintain alternative plans for a single project. The active plan is the one you actually use to track progress.
planned invoice dates
The date on which you intend to print an invoice and send it to the business partner.
planned value
The planned budget amount for a specific period.
Abbreviation: PV
See: Budgeted Cost of Work Scheduled (BCWS)
The person or organizational unit associated with a particular project plan.
planning package
A type of activity. Planning packages are identified during planning to time phase major activities within a control account. You cannot book costs on this activity type.
posting types
An indication of the entry origin or how the entry is posted to Financials. Read for entry: transaction, revenue, order, and costs, and so on.
price policy
You can use the price policy to calculate the equipment, item and subcontracting cost or the purchase price. The sundry costs cost object does not use this policy and labor has its own price search path.
primary structure
The only structure, linked to the estimate version, that can be used to calculate the estimate. This structure is used to check the top-down constraints (if any). The primary structure is one of two structures that you can use to sort estimate lines. Alternatively, you can use the sort structure to sort estimate lines.
prime contractor
The company or the organization that originally acquires the contract.
production progress
The (part of) the project or resource that is completed or used.
profit fee
In a time-phased budget version, the profit retained by the company that performs the project.

The profit fee is expressed as follows:

profit fee = contract amount - management reserve + distributed budget +	undistr. budget
A group of related projects managed in a coordinated way to obtain more benefits and control.
The process by which an element or activity is completed over the lifetime of the project. Progress can be recorded at cost type, cost object, or at control code level.
progress invoice
An invoicing method based on progress for elements and activities. The difference with unit rate is twofold.

Unit rate has:

  • Invoices based on the progress and element or activity sales rate per unit.
  • Invoices settled with the contract amount.
progress motivation lines
A line or specification in progress-based invoicing. Motivation lines or specifications form the basis for an installment. Motivation lines or specifications contain all the billable amounts and quantities.
progress payment requests
Progress payments requests are created based on the cost incurred by the business partner as the work progresses for a contract.
progress results
The output from progress registration while a project is in progress. You can switch interim results on or off by project or by cost object within a project. If you switch it off, you can only report completed.
An endeavor with a specific objective to be met within the prescribed time and financial limitation, and that has been assigned for definition or execution.
project budget
The budget you work in. Control budget is the frozen budget where progress registration, customer invoicing, cost control, and input for project requirements planning are found. The purchase budget is also derived from the project budget.
project currency
If the project is performed in another country, the project currency is useful for monitoring. This currency can be an external currency that is not specified as one of the home currencies.
project deliverable
A tangible or intangible item that is produced or purchased as a result of a project. A project deliverable is intended to be shipped to an internal or external customer.
project status
The way to characterize a project.

LN distinguishes these statuses:

  • Free
    A project definition has been recorded, but the project has not yet been executed. Changes are still possible.
  • Active
    During the execution of a project you can release, purchase, and register cost transactions.
  • Finished
    The project is completed but it has not (yet) been financially closed. You can still register cost transactions. Actual purchase orders cannot be present for the project.
  • Closed
    The project has been financially closed, the project definition can no longer be changed.
  • Archived
    The project is stored in an archive company. The project archive company can be used as a repository for historical project data.
project type
A way to characterize projects.

A project can have one of these types:

  • Main Project: the project structure is composed of subprojects
  • Subproject: the project is a subproject to a main project
  • Single Project: the project is a stand-alone project and is not part of a main project/subproject structure
project warehouse
A warehouse that only stores goods that are used for projects. In contradiction to a normal warehouse goods are administrated for a project and its details. The goods in the default project warehouse represent inventory value. The inventory value of a project warehouse is not part of the project costs. When the goods are transferred to the project, they add to the project costs. A project warehouse can be used by one or more projects.
project WIP warehouse
A warehouse at which logistical transactions occur, but on which no integrations are logged. In project terms, it is as good as a project site in financial terms. In Warehousing, the warehouse type must be Project and the Project WIP Warehouse field must be selected.
provisional amount
An extension type that you must use if you are not sure of a certain part of the project costs when you develop your project. Settle the differences with the provisional-amounts budget and the actual costs at a later stage.:

You are building a house with a standard kitchen costing $ 10,000, which is the provisional amount. When the house is almost finished, the customer determines on a more expensive kitchen, which brings the actual costs to $ 12,000. The customer is invoiced for the extra costs of $ 2,000.

purchase budget
A budget which defines a particular demand on a more detailed level than defined in the bottom-up budget. You can also use this to purchase cost objects with a manual order system.
purchase budget lines
A set of budget lines selected from the project budget to buy certain cost objects that are needed to carry out a project.
purchase contract
An agreement with a supplier for the supply of goods or services.
purchase price
The price at which you buy cost objects expressed in the currency in which you bought them.
An extension type, which enables you to invoice the difference between the budgeted quantity and the actual quantity for a range of cost objects. Use this type when you are unsure of the quantities that you will spend in the project.
reference activity
The smallest unit of work that is required to carry out maintenance.
requirements list
The relation that a project has to sales-order lines or sales-quotation lines. The requirement list is created in Project and triggers the supply chain of order processes.
requirements planning
A LN package that plans the orders and transfers them to other LN packages to fulfill the project requirements.

In the planning you can generate:

  • A project requirement plan to procure material, equipment, and subcontracting, or to collect materials from warehouses
  • A requirement list used for manufactured items produced on order
resource-limited scheduling
A scheduling method in which you cannot overload your resources. This method is prone to project delay.
A liability on an individual or groups to perform assigned actions.
revenue code
A way to categorize invoiced amounts of the same invoice type in order to analyze revenue history.
revenue recognition
For a given contract, revenue recognition is the process that leads to the calculation (and subsequent posting to the General Ledger) of the total revenue that is estimated to have been earned, on the basis of the progress of the contract.
routing operation
A routing line that specifies the work center, the duration, and setup times of a Manufacturing task.
sales-order project
A type of project for which the invoicing and the delivery of goods is carried out in the Sales Control module of Order Management. A sales order project is mostly used for product-based projects and is generated from sales orders.
sales rate
The price or rate of cost objects, elements or activities, at which you sell, that are used for your project.
schedule performance index
A measure of schedule efficiency on a project.

The schedule performance index is determined by measuring the ratio of earned value (EV) to planned value (PV):


If the result is less than 1.0, the project is behind schedule.

If the result is greater than 1.0, the project is ahead of schedule.



Abbreviation: SPI
schedule variance
The schedule variance (SV) is the difference between the scheduled performance of an activity and the actual completion of the activity.
Synonym: SV = Earned Value (EV) – Planned Value (PV)
scope change
Any change to the project scope. A scope change almost always requires an adjustment to the project cost or schedule. A scope change results in more or in less work to be invoiced.
search key
An alternative form of a description used for convenience during searching. Typically, it is an abbreviation, an acronym, or a mnemonic alternative to a full description.
soft commitment
For a project, when a purchase order is approved and due for receipt, it is called a soft commitment.
sort structure
A structure that you can use to sort the estimate lines if the amount of estimate lines requires sorting.
standard cost
The cost object's standard cost.
start and end date percentage
An earned value method in which percentages are assigned to the start and end of the activities. In other words, at the start of the activity, it is assumed that a particular percentage of the project is completed. Consequently, time-phased budget amounts are released based on these percentages.
A step in a project procedure. An activity that corresponds with a session of the Project package. Example: the activity generate control data is performed using the Generate Control Data (tpptc1230m000) session.
structural element
A generic term for a project estimate structure element that can have a number of structure types, such as a project element, activity, cost type, an organization breakdown structure element, or an element of a reporting structure. A primary structure element is part of the primary structure that is linked to the estimate version.
A type of cost object representing services purchased from a third party for use in a project.
sufferance tax
A tax or levy that is payable to a local or municipal authority to compensate for a disruption caused for the duration of a project. For example, a compensation for removing a sidewalk or part of a street to install the water pipes or sewer while constructing a high-rise apartment building.
sundry costs
Indirect cost and costs that do not belong to other cost types are booked as sundry costs, for example, insurance costs or expenses by employees such as meals and hotel costs.
A means of defining indirect project costs. Typically, surcharges are used to cover general overhead costs, including storage, handling, and maintenance costs, management overheads, and so on. Surcharges are calculated as a percentage of direct costs and are posted to a sundry-cost object. Surcharges can be calculated based on costs, budgets and revenues.
SV = Earned Value (EV) – Planned Value (PV)
A specific task. You can use labor codes to control the costs of a labor code or of a group of labor codes.
templates for projects
A user-friendly way to define a project.
third party
A person or organization with an indirect or non-contractual interest in a project, for example, a government body or regulatory agency.
time-limited scheduling
A planning that implies that you cannot delay the project past its current finish date, even if this means overloading your resource.
time-phased budget
A type of budget that is phased and spread out over a period of time. In LN there are various ways to plan the activities and look at the earned value. The earned value concept determines how the budget amounts are released and how the planned value is calculated.
top-down budget
A budget method that distributes the expected project amount across the project structure from top to bottom.

This budget method is used to time-phase the available budget amount across activities. Top-down budgeting supports different earned value methods.

top-down budget version
A version is made to be able to track changes in the course of a project budget. More than one version can be defined for a top-down budget to support a long-term project. One version of the top-down budget will be actual. A version can be closed, which means that no changes can be made to the version data.
top element
The highest element in the multilevel hierarchy of an element structure. The top element is used in the project definition to link the element structure to the project.
trade group
A group of resources with common skills that can be used for a particular labor cost object. If you cannot yet make detailed assignments for employees, you can use trade groups for scheduling.
transaction date
The date on which the planned order was last changed.
undistributed budget
The project-budget part that is not yet distributed across the elements.

You can look at an undistributed budget on various levels:

  • For activities: the undistributed budget equals the budget amount minus distributed budget
  • For the version: the undistributed budget equals the contract amount minus profit fee minus management reserve minus distributed budget
unit of measure
The unit of measure for the cost object. This unit can affect how budget line quantities are calculated.
unit rate
An invoicing method based on the progress and element or activity sales rate per unit. Invoices are booked against the contract amount with installments.
User Defined
A filtering status that determines whether sales or cost line amounts are used in the calculation of the estimate totals, and whether the line is included in the scope of the estimate.
VAC (Variance at Completion)
The cost variance at completion of the project. The variance is calculated using the formula:
Variance at Completion (VAC) = Budget At Completion (BAC) - Estimate At Completion (EAC)
WBS element
A type of activity. Usually used to break down the project scope into smaller pieces. You can define work for a work-break-down structure element. You can aggregate the costs from control accounts or work packages. You cannot book costs on this activity type.
A Dutch law which dictates that a contractor is liable to pay for a subcontractor's taxes and social security contributions.
work authorization status
A formal authorization procedure to begin work on a specific activity. The process helps ensure that the authorized work is done at the right time and in proper sequence.

Work authorization status can have these values:

  • Free
    Work is not authorized for execution.
  • Released
    Work is sanctioned for execution. This status is allowed only for activities under a leading plan and for elements which are part of the leading structure. The parent activity/element and the activity type cannot be changed.
  • On Hold
    Work is under execution and needs to be suspended due to some constraints. The parent activity/element and the activity type cannot be changed.
  • Finished
    Work is executed. The parent activity/element and the activity type cannot be changed.
  • Closed
    Work is completed and all related financial transactions are closed. The parent activity/element and the activity type cannot be changed.
work breakdown structure
The top layer of the activity structure. The WBS can consist of a hierarchy of activities of the WBS element type.
Abbreviation: WBS
The development stage of a business process, which is used to determine if the business process can be modified.
work package
A type of activity. You can detail short-span jobs in work packages and use it for the execution of a project.