Project Budgeting & Forecasting

Project Budgeting & Forecasting:

A budget is an estimate of the financial performance of a project, we can create budget & forecast to plan & manage the project throughout the project life cycle. We can create multiple budget & forecast for a project to model the financial impact. It can be used to track ongoing project performance by comparing the budget & forecast amount to the current actual.

First step for defining a budget is to create a project . If any budget plan version is available on the project template, then oracle projects copies the same to the newly created project . On creation of project we can create & update the work plan & then create initial budget.

Initial budget version by entering details of the new budget , we can choose the below options to create one.

·         We can generate budget amount from workplan , staffing plan , & financial plan.

·         Second option - Directly enter the budget amount  & choose to calculate the cost & revenue amount from entered quantity

·         Or we can copy the budget from another existing one for the project

There are several options for updating a budget version. we can choose an adjustment option to apply a percentage of  increasing or decreasing the quantity, raw cost rate, burden cost rate, bill rate, raw cost, burdened cost, and revenue. Or we can also directly edit the quantity, rate, cost, and revenue amounts. If budget is by time period, Oracle Projects automatically distributes the edited amounts across periods based on the spread curve associated with each planning resource. When you update the quantity, cost, revenue, or rate, Oracle Projects automatically recalculates all other amounts that are dependant on the edited amounts.

You can use the batch concurrent program PRC: Generate Financial Plan Amounts for mass budget generation. When you use the batch concurrent program, Oracle Projects obtains the default values for the budget generation source and method  from the plan settings, task, and resource. The project administrator can schedule the program to run on a regular basis for all projects or for a range of projects.

Project Forecast

Process flow for defining forecasts in oracle projects is to create baseline for the initial budget version of an approved budget plan type. Oracle project automatically creates an initial forecast version from the intial baseline of an approved budget plan are met :

•          The forecast plan type is designated as either a primary cost or primary revenue forecast
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•          No forecast version exists for the plan type

While Oracle Projects usually creates the initial forecast from the initial baseline of an approved budget, you can choose to manually create the initial forecast or generate it from other sources. These sources include the workplan, staffing plan, work quantity, other financial plans, and actual amounts.

Forecasting feature provides project managers with a tool for detemining the amount ofcost incurred & revenue realized to date , as well as the estimated cost & revenue to be realized from the reminder of the project. A forecast consists of a combination of atual amounts and estimate to complete amount. Actual amounts are the actual effort, quantity, cost, and revenue amounts recorded for the project to date. ETC amounts represent the estimated effort, quantity, cost, and revenue amounts necessary to complete the project. You can periodically regenerate a forecast to include the latest actual amounts and redetermine the ETC amounts.