Project Module - Forecasts (Item, Hour, Expense and Fee) Vs Budget Vs Unit Price Agreements

(0) Share

Report

Posted on by Community Member

Hi,

I am investigating to see how we can use the forecasts in project module Vs. Budget and I have a few questions. Is there a relationship between forecasts and budget? In other words is it possible to have forecasts (which captures more information than just a dollar amount) and turn it to a budget? Will the budget and forecasts be in sync even after changing the forecast? or even after doing transactions.

Another question is how is it related to unit price agreements?

Thanks,

Reza

*This post is locked for comments

I have the same question (0)

All responses (13)

Answers (2)

Suggested answer

Adineh Negahdari 807 on at

Like (0)

Report

Hi

Part of your questions depends on your setups.

In what level do you want to control the budget? Do you use activities in WBS and budget on them or not?

Do you use quotation and transfer that to Item requirement or are you going to fill the item requirement by creating purchase order ?

Regards

Was this reply helpful? Yes No
Community Member on at

Like (0)

Report

Hi Adineh,

We currently do not use WBS. There are possibility to use it but definitely we do not track budget based on WBS.

We are not using the quotations and item requirements either. We create purchase orders but it does not fill the item requirements.

What's the role of item requirements in the context of forecasting?

Thanks,

Reza

Was this reply helpful? Yes No
Adineh Negahdari 807 on at

Like (0)

Report

Hi

So you are going to fill the forecast manually, yes?

Regards

Was this reply helpful? Yes No
Verified answer

Ludwig Reinhard Microsoft Employee on at

Like (1)

Report

Hi,

Forecasts were used in the older AX versions before the project budget functionality was available. They basically do the same and you can copy a forecast value to a budget value. The other way around is not possible. Both features are also not automatically in sync, which means that you have to ensure that they are in sync

An important question is whether you need to use forecasts and budgets.

For normal TM projects you don't need forecasts and can track all values as budgets

If you make use of fix price projects and use special estimate procedures, then you need forecasts.

Price agreements are not directly related to your project budgets and forecasts.

Hope this answers your questions.

Best regards,

Ludwig

Was this reply helpful? Yes No
Community Member on at

Like (0)

Report

@Adineh,

Yes we would manually fill in the forecast.

@ Ludwig,

Thanks for your reply. It makes sense. However, I have two other questions:

1- How do you copy forecast to budget?

2- Can forecast be used to support the following scenario?

We need to be able to determine the variance between the budget and actual. We can easily do this using the budgeting feature in project module. However, we need to take one step further and determine the root cause of the variance which is either the change in the unit price or the change in the Qty. Since forecast captures both Qty and Unit price we can use it. However, it means we have to maintain two lists; one is forecast and one is budget and they can easily go out of sync.

Another issue I found is that when a purchase order is created and confirmed it reduces the forecast. Is there an option to stop this?

Thanks,

Reza

Was this reply helpful? Yes No
Suggested answer

Adineh Negahdari 807 on at

Like (0)

Report

Hi

You do not need to copy.

I think for this requirement You can maintain forecast at the item level for monitoring the variance between actual and plan and maintain the budget at the total project level.

What do you mean by reducing the forecast?

Regards

Was this reply helpful? Yes No
Verified answer

Ludwig Reinhard Microsoft Employee on at

Like (1)

Report

Hi Reza,

These are a lot of questions :-)

Let's try to go through them one by one

- How to copy a forecast to a budget?

Open the project budget form. There you can find an Import functionality that allows you importing data from WBS and your forecasts

- Variances

In the budgeting form you can maintain a quantity and value. Those fields are a bit 'hidden' Try to enter your $-amount as usual in the budgeting form. Once you save this amount a details button becomes active where you can enter a quantity and a price that adds up to your budget value.

What you can't do directly in the project budget control forms is splitting up the overall variance that you have against your actual data into a quantity based and a Price based variance. If you need this kind of analysis then you either have to modify the form, i.e. make an adjustment, or try to use BI tools to get that information.

Best regards,

Ludwig

Was this reply helpful? Yes No
guk1964 10,888 on at

Like (0)

Report

As simple explanation at the start of a project the forecast and the budget should be the same.

Actual vs budget gives variance

The actuals for 'work done' plus the budget for 'the work still to be done' is the forecast.

For the forecast calculation, the work to be done may be updated by change control/variation order, and the budget, may or may not have been be revised via approval.

Was this reply helpful? Yes No
Ludwig Reinhard Microsoft Employee on at

Like (0)

Report

Hi magic1949,

I don't think that you can differentiate budgets and forecasts as easy as that because there is a huge overlap of both 'concepts' and AX automatically calculates a remaining budget, which can be identical to a remaining forecast.

The maintenance of budgets and forecasts is currently not perfect and what makes things even more confusing is the fact that the budget models that one requires are setup in the project forecast setup form.

I hope that this overlap and parallelism of functionalities will be fixed with the next releases because that's really confusing.

Best regards,

Ludwig

Was this reply helpful? Yes No
guk1964 10,888 on at

Like (0)

Report

I don't disagree I was just trying to give a simple conceptual explanation as I mentioned there are many factors that influence that simple differentiation.

Was this reply helpful? Yes No