Projects · Daily operations · 9 min read

Estimate, budget and approve changes to the budget

Price the work, turn the estimate into a budget, get it approved by a second person, freeze it and move money between cost codes.

Before you begin

Budgets run on cost codes. Check Configuration > Cost Codes first. Preparing needs project.budget.edit, approving or freezing needs project.budget.approve. The person who submits a budget or a budget change cannot approve it.

Steps: estimate

1. Open Projects > Planning > Estimation and choose the project (or Budget > Estimation on Project 360).
2. Add lines. Each line has a Category, Description, Unit, Qty, Rate, Waste %, Productivity and Markup %. To use an assembly from the Estimation Library, choose it and press Expand assemblies.
3. Press Save lines, then Submit.
4. A user with project.budget.approve presses Approve (or Reject). Copy an approved estimate with New estimate / Copy as new estimate to revise it.

Cost per line is quantity x (1 + waste / 100) x rate / productivity. Price is cost x (1 + markup / 100). Example: 100 m3 of concrete at AED 20, waste 5%, productivity 1, markup 10% gives cost 2,100.00, price 2,310.00 and margin (2,310 - 2,100) / 2,310 = 9.1%.

Only a draft estimate can be edited: 'Only a draft estimate can be edited; make a new revision.'

Steps: budget version

1. Open Planning > Budget and choose the project. Use From estimate to build a draft from the approved estimate, or edit the lines by hand: Cost code, Category, Description, Period (YYYY-MM), Cost and Revenue.
2. Press Save lines, then Submit for approval. Approvers get a notice.
3. A different person presses Approve. Pressing it yourself is refused: 'Somebody other than who submitted it must approve it.'
4. To lock the budget, an approver presses Freeze. Only an approved budget can be frozen.
5. To change a locked budget, press New revision, edit its copied lines and submit it again. Approving the new version marks the old one Revised.

Reject returns a submitted version to Draft. An empty draft cannot be submitted: 'Add budget lines first.'

Steps: budget change

1. On the Budget tab press Budget change.
2. Choose the Kind: increase, decrease, transfer, reallocation or variation.
3. Enter the Amount (above zero), the Cost code and, for a transfer or reallocation, the To cost code.
4. Enter the Reason and save. The change is numbered BC-001 and is Submitted.
5. Another approver approves or rejects it. 'Somebody other than who asked for it must decide it.' stops you deciding your own.

Example: Material 255,000 and Subcontract 170,000. A transfer of 10,000 from Material to Subcontract gives Material 245,000 and Subcontract 180,000. The total stays at 425,000.

What happens next

The Budget vs Actual grid shows Original Budget, Approved Changes, Current Budget, Committed, Actual, Forecast Remaining, Forecast Final and Variance per cost code. Forecast Remaining is the larger of (current budget - actual) and committed. With Material current 255,000, actual 100,000 and committed 180,000: remaining 180,000, forecast final 280,000, variance -25,000.

Good to know

• Without project.cost.view the budget figures show as a dash on Project 360.
• A budget change must be above zero: 'Enter an amount above zero.' A transfer needs two different codes: 'Choose the two cost codes.'
• Approved change orders create approved budget variations automatically. See Manage change orders.