1. Defining and Managing Financial Projects
  2. Considerations for Creating Budgets and Forecasts

Considerations for Creating Budgets and Forecasts

A budget or forecast version represents a specific planning scenario created with a financial plan type. For example, a cost budget that's based on a set of proposed contract terms, or a cost forecast that's based on an engineering estimate.

When the financial project plan is set to baseline, you can create a budget version that isn't enabled for planning in multiple transaction currencies even if the financial project plan is enabled for planning in multiple transaction currencies.

Note: If you're creating a budget or forecast version using a financial plan type that isn't enabled for planning in multiple transaction currencies, then the project costs incurred in a currency other than the project currency are mapped to an existing line in project currency.

You can create a budget or forecast versions using any of the following methods:

  • Generate budget or forecast versions

  • Copy budget or forecast amounts

  • Create budget or forecast lines manually

Generate Budget or Forecast Versions

You can generate budget or forecast versions based on other financial plans or from the project plan. During generation, quantity from the source plan and rates derived from the target financial plan type planning options are used to calculate amounts for the new version. Note that, the ETC amount is always zero if you're using unplanned resources while generating forecasts.

During forecast generation, the application considers all periods with amounts, including periods with net zero amounts.

While generating a forecast, you can:

  • Retain the spread for the source version across periods. In this case, the application spreads the amounts for the remaining periods, and ignores any periods that have actual amounts. You can enable the option to retain the spread of planned amounts from the source at the financial plan type or the forecast version level.

  • Retain manual periodic spread for forecast lines or budget lines even if the duration changes due to a scope change. In this case, the application either adds or reduces the work or shifts the tasks in the plan without losing the period-level adjustments previously made to the forecast or budget. You can enable the option to maintain manual spread on date changes at the financial plan type, project plan type, budget version, or forecast version level.

You can use project resources as the source for budget and forecast cost, revenue, or both. Include all the labor and expense resources or a subset, such as only confirmed labor resources. Some points to consider:

  • Rates for the resources are derived from the rate schedule settings of the financial plan type planning options. For named persons, the rates for planning costs are derived from the named person's business unit or organization when the projects business unit or organization is different from the named person's business unit or organization.

  • Selecting confirmed resources selects the resources in the confirmed and reserved status as well for financial plan generation.

  • The Retain Spread from source option isn't applicable as the periodic spread happens based on the spread curve associated to the resource in the planning and billing resource breakdown structure.

Note: The planning resource breakdown structure is the only planning option that's inherited from the source. You can't edit the planning resource breakdown structure.

Copy Budget or Forecast Amounts

You can create a version by copying another financial plan. Copy plan values without change, or specify a positive or negative percentage by which to adjust amounts before the new version is created.

The copied version inherits planning options from the source financial plan. You can't edit planning options for the new version during initial creation.

Create Budget or Forecast Lines Manually

When you manually create a budget or forecast version, the basic task structure is recreated without any quantities, rates, or amounts. Budget or forecast dates are based on the planned dates for tasks entered in the project plan.

To create the version efficiently, add the following at the selected planning level:

  • Planning resources: Add all resources in the associated planning resource breakdown structure.

  • Financial resources: Add a placeholder resource so that you can enter amounts against tasks without having to assign a planning resource.

Depending on your access, you can edit planning options inherited from the selected financial plan type. Of course, generation options don't apply when manually creating versions.

Note that while setting a financial project baseline, you can automatically generate a project budget and set the baseline. However, if the project task structure contains a large number of periodic lines, the budget generation process can take a significant amount of time before confirming the setting of the financial project plan baseline. To reduce the delay in the creation of the financial project baseline, you can defer the budget generation process and run it in the background.

Defer Financial Plan Creation

When the project task structure contains a large number of periodic lines, for example, over 10000 periodic lines, the application defers the financial plan creation. Depending on the threshold value derived from historical data, the application decides whether to process the financial plan generation immediately or to defer it.

Also, while setting a financial project plan baseline for a project with a large number of periodic lines, the application defers the financial plan generation process and completes the financial project plan baseline creation.