Using budgets for a project
You can use the Planning functionality to define, analyze and modify a project budget. A project can be based on elements or activities.
If the project budget is finalized, you can use Budgeting to derive a second budget, called a control budget. You can modify a finalized budget using adjustments and/or extensions.
These budget types can be used for projects:
- Element-based budget: For a budget based on elements, you must:
- Create elements to represent the main parts of your project.
- Position the elements in a hierarchical structure.
- Specify the budget lines of cost objects for the elements. For example, hours worked on a ship haul is a labor line.
- Activity-based budget: For a budget based on activities, you must:
- Create budget versions to keep track of changes in your top-down budget.
- Distribute amounts to activities that are created in Planning.
- Assign the earned value method (EVM)-related data, to determine the budget amounts that can be released.
- Generate the planned value.
- Purchase budgets: You can create one or more purchase budgets to procure cost objects with long delivery times, thereby averting the step-by-step process of project budgeting and execution.
- Control budget: When the project budget is finalized, you can create a control
budget that can be used for:
- Generating planned orders in the Requirements Planning.
- Recording progress with the Project Progress.
- Recording actual costs in the Project Accounting.
- Generating invoices for customers in the Invoicing preparation.