Budget items

Budget items are the individual line-items of a budget on a programme, project, sub-project or change request. Budget items can be any costs baseline for the parent asset for example hardware, resources, 3rd party licences etc.A budget item is dependent on two attributes of the parent asset:

Start date	If the asset start date is set then the month intervals for the budget item will be based on that start date.
Budget intervals	The number of months allowed in the budget item is set using this asset attribute.

Budget items can contain:

Baseline	This is the original budget for the item. It may be locked through workflow.
Approved changes	Once the budget item has been baselined any changes must be approved through the steering committee and can then be added to this field.
Savings	This is the savings related to this initiative.
Deferrals	This is any deferrals related to this initiative.
Total budget	The total budget adds up the baseline, approved changes, savings and deferrals.
Uncommitted forecast	This is the forecast from the programme/project manager for this budget item. This forecast should not include committed expenditure. If the uncommitted forecast is left blank then Psoda will automatically calculate it as the sum of the baseline and approved changes minus the committed forecast.
Forecast changes	You can capture any changes to your forecast here if you do not want to change the Uncommitted Forecast line.
Committed forecast	This is a forecast of the committed expenditure on the programme/project.
Total forecast	The total forecast adds up the uncommitted forecast, forecast changes and committed forecast.

Budget items also show:

Actual	This is the actual expenditure against this budget item. It is calculated by adding all the expenses logged for this budget item.
Variance	The variance is calculated to show the difference between the planned and the actual expenditure. The variance calculation is explained in more detail below.

When costs are captured against the project they can be allocated to an applicable budget item. That way you can track the actual expenditures against the original baselines.Budget items can be grouped into sub-groups of the budget, down to as many levels as is required. The baselines from the items are summed into the sub-group; and ultimately into the budget.A workflow can also be selected for each budget. When you add the budget item you can select the Standard Budget Item Workflow, or you can add a new workflow for budgets specific to your organisation.

Calculating variance

Variance shows the difference between the planned and the actual expenditure. It is calculated as follows:

• If uncommitted forecast is set then
  • variance = actual – (uncommitted forecast + committed forecast)
• If uncommitted forecast is blank then:
  • If committed forecast > baseline + approved changes then
    • variance = actual – committed forecast
  • Else
    • variance = actual – (baseline + approved changes)