Commitments, forecast and over-budget checks
Every budget line shows what is already ordered or contracted, what is spent, what is still to come and where the line will end. A project purchase order that goes past what is left of its line needs a Construction Manager to confirm it.
PLANSFrom Growth
The problem it solves
- The budget looks fine because the steel is ordered but not yet billed.
- A buyer places an order that eats the rest of a cost head and nobody notices until the bill arrives.
- The forecast at completion is a figure someone guesses in a spreadsheet each month.
How it works
- Approve the project's building budget. From then on, every confirmed purchase order and running work order counts on its budget line.
- What is ordered but not yet billed shows as Committed; what is billed or approved shows as Actual.
- Where you know more is still to be spent, type it in To Complete on the line. Left empty, the line assumes the rest of the budget will be used.
- Forecast is actual plus committed plus to complete. Variance is the current budget less the forecast; below zero is an overrun and the line turns red.
- When someone confirms a project purchase order, its lines are checked against what is left of their budget line. If any goes past, only a Construction Manager can confirm it, and the order notes what went over.
Everything it does
Committed
- Purchase order lines of the project that are ordered and not yet billed, untaxed, in the project's currency
- Items of running subcontract work orders not yet billed, at the item's rate; a closed order commits nothing more
- Typed Costs marked Committed
- Shown per line and in total, and as a measure in Budget Analysis
Forecast and variance
- To Complete: typed per line; empty means the budget left after actual and committed
- Forecast = actual + committed + to complete
- Variance = current budget - forecast; below zero is an overrun
- % used = (committed + actual) ÷ current budget
- Forecast per unit of built-up area on the budget
- Filter Over Budget on budgets and on lines
The check on purchase orders
- Runs when a purchase order with a Construction project is confirmed
- Each line is matched to its budget line by cost code and place, else the cost code's whole-project line
- Lines with no cost code use the project's Material Cost Code
- Past what is left (current - committed - actual): a Construction Manager confirms, others are stopped with the list of lines and amounts
- A confirmed overrun is written on the order's chatter
- No approved budget, no check
Reports
- Budget Analysis pivot: current, committed, actual, forecast and variance by project and cost code
- Profitability shows committed per project (Scale)
- The lender report of a project loan carries budget, committed, actual, forecast and variance by cost code (Lending add-on)
Who uses it
Construction ManagerTypes the to-complete figures, reads the forecast, and confirms a purchase order that goes over when it is justified.
Purchase staffConfirm project orders; an order past the budget is stopped for a manager.
Project managerWatches committed and forecast on their project's lines and gets the 80 % and 100 % alerts.
Where you use it
- Web: Construction > Projects > Finance > Costs > Building Budgets (the Lines tab)
- Web: Construction > Projects > Reporting > Budget Analysis
- Web: the purchase order's Confirm button, for the over-budget check
- Not on the phone app: the forecast is read on the web
What you control
Settings
- To Complete per budget line (empty to start with)
- The project's Material Cost Code and Subcontract Cost Code, for lines without one
- Who may confirm past the budget: Construction Managers (fixed)
Approvals
- The over-budget check is a confirm by a Construction Manager, not an approval chain; revising the budget goes through Budget Revision
Notifications
- Budget Line at 80 % / 100 %: committed counts towards % used. The project manager hears in the app, by email and on the phone
Questions
Is a purchase order blocked or just warned?
Blocked for everyone except a Construction Manager. The person sees which lines go over and by how much. A Construction Manager can confirm it, and the order keeps a note of the overrun.Do subcontract work orders count as committed?
Yes. While a work order is running, the quantity not yet billed times the rate is committed on its cost code and place. Once billed it moves to actual.How is the forecast worked out?
Actual plus committed plus to complete. Type to complete where you expect more spend than the order book shows. Left empty, the line assumes the rest of its budget will be spent.Are work orders checked against the budget like purchase orders?
No. Only purchase orders are checked when confirmed. Work orders go through their own approval chain, and their value shows as committed on the budget.Related features
MONEYBuilding budget with 80 and 100 % alertsOne budget per project, by cost code and place, approved once and changed only by approved revisions. Costs from site flow into it every hour. The project manager is told when a line passes 80 % and 100 % used.MONEYMaterial requests, orders, transfers and issuesSite staff ask for material from the site or the app, and a manager approves. The request becomes a purchase order to the site store or a transfer from another site. What arrives is issued to the work, a place or a subcontractor. Every order carries the project, cost code and place.MONEYWork orders and subcontractor billsA work order to each subcontractor with items, rates and terms, approved before work starts. Running bills come from certified measurements. They take off retention, advance, back-charges and TDS, and become the vendor bill.MONEYProfitability per projectOne row per project: value sold, budget, revenue from approved client bills and cost from the building budget. Cost is split CAPEX and OPEX, with committed, margin and budget used.MONEYCash flow planA month-by-month plan of money in and out for each project, filled from the budget, schedule, bills, wages and loans. Actual figures sit beside it, with the most money the project will need and when.
See your next site report on it.
Tell us what you build, how many sites you run and how your client hears about progress today. We will set up a project with you and send your first daily update.