Using a top-down budget

The top-down budgeting method includes the total project cost that is subdivided for individual activities, based on historical costs and other project variables. The top-down budget provides you:

• An overview of budget possibilities.
• The feasibility of the project from a budget point of view.

You must create a time-phased budget to work with this budget.

The top-down budget is used to distribute amounts across an activity structure. The constraint of this budget is, the amount is restricted for the lower level elements, and therefore the lower level amounts are not allowed to be higher than the distributed (top) amount.

Time phase the top-down budget

If the budget and cost for each individual activity are uncertain, but the approximate distributed amount is known, you can use a top-down budget for that project . For the top-down budget version, specify the contract amount, the profit fee, and the management fee, and the remaining amount is distributed among the activities. You can use this amount for budgeting. In the top-down budget version, the activity structure is linked using the Generate Structure and Top-Down Budget (tpptc5210m000) session, and you can allocate the distributed amount across the activities using the Top Down Budget Data (tpptc5510m000) session. The version contains a derived structure. You can specify data for a new version if the preliminary version is final .

Time phase the bottom-up budget

You can time phase the bottom-up activity budget by creating top-down budget data using the Generate Structure and Top-Down Budget (tpptc5210m000) session. As a result, the bottom-up budget becomes time phased.

For example, a project has a top activity and two child activities such as ACT1 and ACT2. The bottom-up budget amount for the top activity is $600, for ACT1 is $300, and for ACT2 is $300. A budget version also exists with budget $500 for the top activity, $300 for Activity1, and $200 for Activity2. Using the Generate Structure and Top-Down Budget (tpptc5210m000) session, an activity structure is created with Top, ACT1, and ACT2 as part of the top-down structure. The total budget amount of $600 is distributed first to the Top activity and later to the child activities ACT1 ($300) and ACT2 ($300). The total amount that is distributed, exceeds the budget version amount $500.

If the bottom-up amount is to be considered using the Copy Activity Budget Lines option in the Generate Structure and Top-Down Budget (tpptc5210m000) session, the budget amount for top activity totals to $600. This amount is more than the specified budget version amount of $500. Infor LN calculates the profit amount of $100, which is a negative amount in this case. This amount is calculated only if the If exceeding Budget Version Amount field is set to Continue in the Generate Structure and Top-Down Budget (tpptc5210m000) session.