Using budgets for a project

The project budget is the estimated total costs required to complete a set of activities or work packages. A project can be based on elements or activities. You can define, analyze and modify a project budget using the various features available in the Budgeting module.

The budget can be set up as a detailed budget, called a bottom-up budget, or as a rough-cut budget, called a top-down budget. After the project budget is finalized (Actual or Final status), you can use a control budget that allows to generate planned PRP orders. You can modify a finalized budget using adjustments and/or extensions.

These budget types can be used for projects:

• Element-based budget: This type of budget is based on elements that represent the main parts of the project, which are positioned in a hierarchical structure. You can create budget lines of cost objects against the elements. For example, hours worked on a ship haul are a labor line.
• Activity-based budget: You can use an activity budget to:
  • 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 a purchase budget 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.
• Time-phased budget (TPB): A TPB is a time-scaled budget based on activities, created from a top-down budget.