Planning Expenses

The Projects Expense component provides several options to help you plan project expenses:

Table 6-3 Planning Project Expenses

Task	Description	More Information
Overview	Review project expenses in a dashboard format.	Analyzing Project Financials With Dashboards
Driver Based	Perform driver-based expense planning by setting up expense assumptions.	Entering Expense Drivers
Direct Entry	Enter expenses directly in a spreadsheet-like format. Plan project benefits.	Entering Expenses Directly and Planning Project Benefits (Internal Projects Only)
Project Expense	Review overall expenses for a project in a grid.	Reviewing Overall Project Expenses
Assumptions	Review global rate assumptions that drive project financials.	Entering Project Assumptions

Entering Expense Drivers

When you do driver-based planning using expense assumptions, expenses are calculated using the built-in formulas, using global rates and the expense drivers you enter. For example, when you enter labor assumptions for your project, such as the job class, rate, start and end dates, the total project labor costs are automatically calculated using the rates per job class and the start and end dates.

To use driver-based expense planning, review the existing rates your administrator entered, and then add and modify your expense assumptions.

1. Click Expense .
2. Click Driver Based .
3. Select the horizontal tab for the expense assumptions you want to enter and select the members from the Point of View, and then review or update driver details.
   • Labor—Enter details for labor assumptions for each job or job code, such as start and end date, FTE, location.
   • Equipment—For each type of equipment, enter start and end dates and units.
   • Material—For each type of material, enter cash flow incidence. Set the payment terms for expenses; the selected value impacts the cash outflow on the project. Options are: Two months prior, one month prior, current month, next month, 2 months after, 3 months after, 4 months after.
   • Other—Enter any additional resources and the cash flow incidence or other custom assumptions for each.
4. If the project is set up with Override Rates set to Yes, and the global rate is not correct for a project, enter the new rate.

5. To add or remove expense assumptions, from the Actions menu, select Add Line Items or Remove Line Item.

6. When you've finished entering expense assumptions, from the Actions menu, select Calculate Expenses.

   Note:

   If Projects is integrated with Workforce, calculating expenses pushes data such as utilization to Workforce. Then, in Workforce you must also select Aggregate from the Actions menu.

   If Projects is integrated with Financials, and expense accounts are mapped, calculating expenses and rolling up Projects pushes data to Financials.

Entering Expenses Directly

You can directly enter project expenses. When you enter expenses directly, no driver-based calculations are used.

When you change project dates, or when you import projects, before directly entering expenses, on the Project Details form, from the Actions menu, click Refresh Project Dates.

1. Click Expenses .
2. Click Direct Entry .
3. Select the project from the Point of View, and then select expense types and enter expense details on each row.

   Tip:

   You can copy a cell value and drag the cursor to fill all the cells in a row.

   If you enter at the Year total level, values are automatically spread evenly to lower levels.

4. From the Actions menu, you can select Add Line Items or Remove Line Item.

5. When you've finished entering expenses, from the Actions menu, select Calculate Expenses.

Planning Project Benefits (Internal Projects Only)

In addition to planning expenses, you can also plan for tracking project benefits for both capital and indirect projects. By planning project benefits, you can quantify the financial benefits to help justify the need for the project. For example, if you are setting up a new web site, you can track financial benefits that might come out of the project. For example, you might get incremental revenue from leads from the web site, or, if you handle queries on the web site, you might see call center savings. Or a new video conferencing facility can lead to savings on travel expenses.

You can also plan the non-financial benefits of a project, which can be used to justify a project and help measure a project's success. For example, a new web site might improve the customer satisfaction index, or you might see an incremental increase in your user base by investing in the project. You can quantify the benefits and map them to various project accounts.

1. Click Expenses .
2. Click Direct Entry .

3. Select Project Financial Benefits to enter financial benefits for the selected account. Enter any assumptions about the benefit, and enter the benefit amount.

   The benefit amount is used in ROI and other KPI calculations to justify the project. The financial benefits can be mapped to a revenue account or an expense account. Based on this definition, the amounts are assigned to the respective financial accounts.

4. Select Project Non Financial Benefits and select a non financial benefit. Enter any assumptions about the benefit and enter a value.

   Non financial benefits help set additional measurable targets to justify the project over and above the financial benefits. While these are not used in KPI calculations, they can be tracked to quantify the benefit. For example, if you want to set the user base to grow to a certain level based on a marketing campaign project, set the target values here.

   You can also capture additional qualitative project benefits that aren't trackable with numbers that can help justify projects. For example, you could note that customers will have a better user experience with the improved web site design.

Rules are run when you save and the KPIs are calculated based on the financial benefits you specified. This is not applicable for non financial benefits because they are not used for calculations.

Reviewing Overall Project Expenses

You can review an overall summary of project expenses in a spreadsheet-like format. Values come from driver-based expenses and from direct input.

1. Click Expenses. .
2. Click Project Expense .
3. Change the project or other members to review by selecting different members from the Point of View.

Tutorials

Tutorials provide instructions with sequenced videos and documentation to help you learn a topic.

Your Goal	Learn How
This tutorial shows you how to plan for project expenses using driver-based assumptions and direct input expenses.	Planning for Project Expenses
This tutorial shows you how to identify and enter financial and non-financial project benefits.	Adding Financial and Non Financial Project Benefits