Project Budgeting

Before you start

• The settings in 'Settings - Project Management' (CRS590) must be defined. The settings control the accounting dimensions for the project and the elements.
• Budget items must be created.
• At least one project element must be flagged for budgeting.
• The project must be open (project status is 10 or higher).

Follow these steps

This diagram illustrates the activities in this process.

Entering Budget Version

A project can be budgeted more than once. Each budget is then saved as a separate version. Different versions are necessary when the project changes scope, as when activities or a subproject are added.

The budget version indicates if the budgeting is delegated, which means it must be confirmed per project element. A different forecast version (with status 19=generated from budget version) is generated each time a budget version is entered. See Project Forecasting.

Entering Budget Values

Budget values are determined when budget items are entered or the material budget is generated and processed.

Enter Budget Items

Budget values are entered using budget items. Budget templates can be used to simplify entry. For this, the budget template is specified in the project element to be budgeted. Whether quantity, price, or amount is entered during budgeting must be set for each budget item.

Budget amounts can be entered in different currencies. However, currency codes and exchange rates must be connected to the project in 'Project. Connect Currencies' (POS172), which is reached from 'Project.Open' (POS091).

You can budget:

• Revenues.
• Costs charged against the project when activities are reported. See Performing Projects.
• Costs charged against the project immediately at the start. See Project Activities.

If budgeting is delegated, it must be confirmed per project element.

Generate and Process Material Budget

Budget amounts can also be totaled from products or material connected to a budget item. This creates a sublevel to the item that contains the products/material. The locked standard costs for these are totaled to arrive at the budget amount.

Material budgets can contain costs for:

• Manufactured products
• Purchased material (with costs are charge against the project)
• Material requisitioned from inventory.

Products and material in the material budget can be entered manually, or generated from the product structure or a material template.

Generating from a Product Structure

Generating from a product structure is based on the products to be manufactured. Planned manufacturing orders are entered in a project activity with the element category Manufacture. The products and material in the product structure are retrieved to the material budget according to the structure when it is order-initiated. The product configuration of the specific product is also considered.

Generating from a Material Template

Generating from a material is based on the material templates connected to the various project activities. Material templates are entered in 'Material Template. Open' (POS080), where they can be connected to any of the following activity categories:

• Purchasing
• Manufacturing
• Requisition/distribution
• Customer order.

When generating from a product structure or material template, the locked standard cost for the material or products is retrieved. When you specify a budget item for the product or material, the budget value is updated in it.

When a material template is generated, the budget item to be updated is retrieved. This is done in the following order of priority:

1. The budget item is entered in the material line in the material template, in 'Material Template. Open' (POS080).

2. The budget item is entered on the P panel in 'Material Budget Line. Open' (POS291).

3. The budget item is entered in 'Settings - Project Management' (CRS590).

The budget item retrieved for either 2 or 3 above is regulated by the acquisition method of the product or material. The budget item for the product/material can be changed as long as the planned order is not generated. Whether the amount or amount per quantity is updated from the material budget is specified for each budget item.

Budget amounts can also be updated in different currencies. However, currency codes and exchange rates must be connected to the project in 'Project. Connect Currencies' (POS172), which is reached from 'Project.Open' (POS091). Note that the material budget is always entered in the local currency.

Locking Budget Version

Budget items are totaled upwards in the project structure when the budget version is locked. This results in the total budget at the main project level. All budgeting must be confirmed before a delegated budget can be locked.

When a project budget is locked, financial outcome is reported against this version. The forecast version created with this budget version is also locked. Journal vouchers are generated for the direct costs from the project preparation.

A budget version cannot be locked if a product structure in the material budget is regenerated and released orders are included in the current forecast version. These orders must be connected to the material budget before the budget version can be locked.

Previous budget versions can be deleted.