Once you begin using P6 and creating a project from scratch, you’ll notice that it is loaded with a lot of customizable features – one of them being budget and expense tracking. P6 has a great ability to track all the dollars you spend in your project from either “top-to-bottom” or “bottom-to-top” perspectives, while being able to compare this to the budgeted amount your team originally determined.
The value of these features is more notable when P6 is able to take all the specific data you have inputted and analysing it visually with charts and graphs, which is great for reporting. As we will see in the following screen captures of the software, P6 understands how to help you successfully manage your project budget by allowing you to keep expenditures up to date from at the activity level for labour expenses, equipment, materials, etc.
Figure 1: Use your layout to easily see all activity and expense related information. Remember that you can print your screen as a report exactly the way you have it set-up in front of you. (Click to view images in full size; Screen capture using P6 Windows)
Figure 2: Using a combination of the columns options and available layouts can help you get a quick comparison of your budgeted costs versus actual costs. There are numerous combinations and options designed for customizability to your needs.
Figure 3: Depending on how detailed your estimating gets, you can assign a budget to individual activities in P6. You will need to have a pre-populated resource dictionary (this should be one of the first things you set-up on installation). You select the role and can enter the budgeted cost in the activity details pane. P6 will automatically do the bottom-to-top calculations in the individual WBS levels as you can see with the Budgeted Total Cost column.
Figure 4: The activity usage profile is a pane that is opened below the Gantt chart and can be configured to show a histogram and graphical analysis of your overall project budget versus actuals.
By keeping on top of your schedule updating routine, you can effectively manage your expenses and budget-risks together. Utilizing the variety of combinations and tools that Primavera provides can help you eliminate or minimize future budgeting problems.
COMMON BUDGET PROBLEMS TO LOOK OUT FOR
- Over budget trending – activities from working unscheduled overtime or applying more resources than estimated. If the trend continues, it should be considered as a budget risk, unless there are mitigating factors to help reverse it.
- Underestimating labor and non-labour costs, skewing your estimated projections. Having a contingency budget will create room and balance out the difference.
- Missed activities or project expenses (that are required to finish the project) during the estimating phase. Unless there are mitigating factors, this definitely should be raised as a budget risk.
- Activities outside of the project scope or charter are being worked on. This will require scope change management and possibly a need to revise the budget; these activities should be put on hold until approval is given.
Although the above scenarios require remedial action, there are scenarios that allow for your project to be over budget without being an actual problem:
- Making major purchases earlier than its actual budgeted period. Usually, this over-budget problem will even out over time.
- When your project is ahead of schedule, but required paying resources overtime. The expenditures at project completion can sometimes be within the original allocated budget for the initial estimated time frame of the project.
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