The contract budget

The budget is the project's cost report on one screen. One row per budget code, and eleven money columns that take you from what you set out to spend, through what you have committed and paid, to where you now think you will finish. Everything in it except the original figures and your forecast is derived from contracts, variations, claims and direct costs you have already recorded, so it is a view of the project rather than a spreadsheet somebody maintains.

Find it at Project, then Contracts, then Budget, and it has three tabs: the budget itself, its History, and its Snapshots.

Budget codes

Every row is a budget code, and a budget code is a cost code plus a cost type.

Cost codes and cost types

A cost code is the work: 01 Site Preparation, 02 Earthworks, 03 Concrete Works, down through as many levels as you need. Cost codes are a hierarchy.

A cost type is the kind of money: SUB Subcontract, PRO Professional Services, LAB Labour, MAT Materials, EQP Equipment. Cost types are a flat list.

Put a cost code and a cost type together and you get a budget code such as 04.00-LAB, which is the string that appears on a schedule of values line, a variation line, a claim line and a direct cost line.

That is the whole mechanism. A line of cost lands in the budget because it carries a budget code, and one that carries none is simply not in the report. It is worth saying out loud because the most common reason a budget looks wrong is a schedule of values that was priced without codes.

The columns

Reading left to right is reading the story of the money.

Original Budget Amount

The sum of the budget line items you entered for this code. Enter them from Add Budget Item, then Create Budget Line Item, where a multi-line calculator gives you quantity times rate per line rather than asking for a single number you have to be able to defend later.

Budget Modifications

The net effect of transfers in and out of this code. See moving money between codes, below.

Approved HCVs, or head contract variations

Approved head contract variations landing on this code. A variation approved on a contract whose type is Head Contract is money you have been granted rather than money you have spent, so it increases what there is to spend rather than what has been spent.

Revised Budget

Original Budget Amount, plus Budget Modifications, plus Approved HCVs. It is the working budget, and it is what everything downstream is measured against.

Committed Costs

What you have signed for: every schedule of values line on every contract carrying this code, plus every approved variation line on it.

Actual Costs to Date

What has been certified: the sum of approved progress claim lines against this code.

Pending VARs

Variations that have been submitted and are still waiting on a decision. They are a warning rather than a commitment, which is why they sit in their own column and are not in Committed Costs.

Direct Costs

Spending with no contract behind it, allocated to this code. Costs whose status is flagged to be excluded from the budget, a voided invoice for instance, are left out.

Forecast to Complete

What you think it will take to finish this scope. Left on automatic it holds Revised Budget less Committed Costs, which is the sensible default because it assumes what you have not yet committed is what you have left to spend. Switch it to manual on the codes where you know better, which is usually the ones in trouble.

Forecast Final Cost

Committed Costs plus Forecast to Complete plus Direct Costs: the total spend at completion if the current forecast holds.

Gain/Loss

Revised Budget less Forecast Final Cost. Negative means this code is heading over. It is the column people scroll to, and the only one that is an opinion, because the forecast inside it is yours.

Tracing a figure back

Each cell that aggregates something opens to show what it aggregated, so a committed figure can be traced back to the contracts and variations that made it. Every code also takes narrative notes, which is where the reason for a forecast belongs.

Moving money between codes

Trades come in over and under, and the answer is a transfer rather than an edit. Add Budget Item, then Create Budget Modification, moves an amount from one budget code to another with a date, a reference and a note.

A transfer is recorded as two entries, one out and one in, so the project's total budget does not change and both codes show their side of it. Teralo refuses a transfer the source cannot fund, where available means the revised budget less what is already committed, and tells you the two figures rather than just declining. That is the check that stops a budget being balanced on paper by moving money that was already spent.

Transfer history is on each code in its detail panel, and there is a Record transfer button there that opens the dialog with that code already filled in as the source.

Locking, snapshots and history

Budget Locked freezes the original amounts. It does not stop the report moving, because commitments and claims keep arriving, but it stops anybody editing the baseline those movements are measured against. Lock it once the budget is agreed.

Create Snapshot stores the whole table as it stands, with a label and a description. Snapshots are how you answer "what did we think in March", and you can compare the live budget against one of them. Take one at every reporting cycle; it costs nothing and cannot be reconstructed later.

History is the event log: every line item, transfer, lock and snapshot, with who and when.

Direct costs

Not every cost has a contract. Site establishment, plant hire, a one-off invoice, the skip bins. Those go in as direct costs, on their own tab beside the register.

A direct cost has a description, a type, a status, a vendor, an invoice date and a paid date, and it breaks down into lines against budget codes exactly as a schedule of values does. Types and statuses are your organisation's, and a status can be flagged to be excluded from the budget, which is how a voided invoice stops counting without being deleted. There is a bulk upload for the months when there are eighty of them.

Direct costs are host only, and they feed the Direct Costs column above.

Where the budget goes next

Cashflow is this budget spread over time. Assign a schedule of values item to a task on the program and the task's dates decide which months the money falls in; a code's forecast to complete can be assigned the same way.

SettingsHost only

Budget codes are configured at Organisation, then Tools, then Budget Codes, on two tabs: Cost Types and Cost Codes. Cost codes are a hierarchy, cost types are a flat list, and the budget codes themselves are the combinations of the two. Projects activate the organisation's codes and can add their own. See Organisation level and project level.

Get this right early and change it rarely. A budget code recorded on a schedule line, a variation line or a claim line is stored as text on that record, permanently, because a cost report from two years ago has to keep saying what it said. That is why Teralo will not let you remove a cost code or cost type that project data is already using.

Direct cost types and statuses live one page across, at Organisation, then Tools, then Contracts.

PermissionsHost only

The budget is one permission, manage budget, and it is deliberately not split into view and edit. Somebody who can see the forecast final cost on every trade can see the commercial position of the whole job, which is not a read-only sort of thing.

Direct costs carry their own four permissions and are additionally host only, so a guest organisation granted one still cannot see the tab. See How permissions work.