Costs · Forecast
The textbook formulas for estimate at completion assume an earned value system that most building projects never set up. A project manager still needs the answer: what will this job cost when it is finished? This page explains the bottom-up version that fits a building project, the plain sum of what has been invoiced and what is still to come, and how Fidrel calculates and shows it.
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Dividing the budget by a cost performance index only works if someone measures earned value for every item each month. On a typical building job nobody does, so the formula stays in the training course and the project runs on a guess.
A forecast typed in March is wrong by June, and nothing on the page shows its age. The budget looks fine until an invoice arrives that the forecast never expected.
When the forecast column is empty, the number people read is the budget. It says what was planned, not what is likely to be paid, and the two part ways quietly.
For a line where a remaining cost forecast has been saved, the estimate at completion is the invoiced cost plus that remaining amount. For a line without one, Fidrel uses the highest of the current budget, the committed cost and the invoiced cost, so a line never reads lower than what is already committed or paid. For example, with a current budget of $100,000, $60,000 invoiced and a remaining forecast of $55,000, the estimate at completion is $115,000, which is $15,000 over. With no forecast saved and $90,000 committed, the same line reads $100,000, the budget.
Cost tracking
The remaining forecast is a person’s judgment, and Fidrel shows it as such. It does not compute a cost performance index from earned value. Instead, budget items can be linked to schedule activities, and an alert warns when costs are ahead of production. That is a plain comparison of money spent with progress entered, which suits a project that keeps progress by activity and does not keep earned value by item.
Step 1
Approve the estimate as the baseline so every priced line becomes a budget item. Approved change orders then move the current budget, so the line you forecast against is the current one and not the original.
Step 2
Code each vendor invoice to the lines it belongs to and approve it. Approved invoices count in cost tracking, and the table shows the share consumed beside each line’s current budget.
Step 3
For each line where work remains, type the Remaining cost forecast and use Save forecast, with a Reason. Budgets and forecasts are saved as snapshots, so earlier versions are retained and you can see how the forecast moved.
Step 4
The table shows the estimate at completion, the variance and the amount committed but not invoiced for every line, and the project total above them. Filter to the lines that are over budget to see where the forecast is heading.
Step 5
Choose the Alert thresholds so Fidrel flags when the forecast exceeds the budget, when budget consumption runs high, when commitments exceed the budget or when costs are ahead of production.
On the Financials page the same estimate at completion is totaled for each of an organization’s projects. A project reads Over budget when its forecast is above the current budget, and Watch when change orders are pending, invoices are overdue or the forecast is close to the budget. A forecast estimate is also available as a type of estimate, an assessment of the cost at completion that is kept beside the baseline and never approved as the budget.
Fidrel computes no cost performance index, schedule performance index or other earned value measure. The forecast of the remaining work is typed in by a person; Fidrel does not predict it. Work that has been done but not yet invoiced is not counted until the invoice is approved, so it belongs in the remaining forecast.
Your trial applies to your first own project and starts when that project is created. No card required. Afterwards, choose card or invoice to continue.
The project system of the future connects people, documents and decisions. Discover the thinking behind Fidrel.
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On site, answers need to be close at hand. Fidrel displays DWG drawings in your mobile browser, within the project’s document structure.
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When everyone can see the next step, moving the project forward becomes easier. Fidrel brings activities, dates and reported progress together in a shared Gantt view.
Read moreCosts · Forecast
Anything else on your mind? We are happy to help.
Talk to usThe expected total cost of a job or a cost line when it is finished: what has already been spent plus a realistic estimate of what is still to be spent.
It adds the invoiced cost and the remaining cost forecast on each line. Without a saved forecast it uses the highest of the current budget, the committed cost and the invoiced cost.
No. Fidrel does not compute earned value indexes. You enter the remaining forecast for each line, and Fidrel adds what has been invoiced to it.
Whenever commitments or expectations change, and at least when the project is reviewed each month. The figures are calculated when the page is opened, and the alerts tell you when the forecast passes the budget.
A change order linked to a budget item shows as an expected change while it is pending. Once approved, its amount is part of the current budget, and the estimate at completion is compared with that new budget.
