Project forecast versus budgets

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Posted on by Andy_T

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Hi All

As a general rule of thumb what advantages are there to maintaining forecasts on a project in addition to budgets.

They appear much and the same thing with a few subtle difference (i.e. specifying quantities and dates).

There seems to be a big (and maybe unnecessary) overhead to maintaining both?

I can see the benefits of forecast with fixed price projects and working out cost to complete...but with T&M (which make up the majority of out projects) it is less clear.

I understand budgets are a relatively recent addition to AX - forecasts used to be the only way of budgeting - so I'm wondering if they are really necessary for T&M projects and if they are likely to be deprecated ever?

Thanks in advance for any insights.

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Eugen Glasow 6,359 on at

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Forget the forecasts and use the budgets only: in one form you manage all 3 types of costs. Here comes the surprise: on an approval by an automatic workflow, the project budget creates 2 shadow forecasts ("original" and "remaining") you can use in the PoC calculation or elsewhere. To display the shadow forecasts, remove the default filter in the forecast form(s). I encourage all my customers to only use the project budget as a useful UI to maintain and keep a history of forecasts.

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qianwang 7,168 on at

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Hi Miller,

The forecasting is a separate mechanism for predicting the actual transactions (Costs and revenues) that may be incurred in the project. But project budgets can be called like a rigid plan of spending in the project.

If your organization focus mainly on the financial amounts instead of transactional details, the budget control is as a very great cost and revenue management tool. It can be done at project, activity and category level, not limit for a specific date and so on.

I think in most cases (such as the T&M project), the budget will become easier and easier, which is very necessary.

Regards,

QianQW

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Rahul Mohta 21,032 on at

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Ledger budget is used to define, track and control budget/postings to main account/general ledger

Project budget is used to define budget at project and individual transaction type level

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Ludwig Reinhard Microsoft Employee on at

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Hi Miller,

You are right that project forecasts and budgets are kind of similar thing.

Yet they are slightly different and I do not fully agree with the statements that had been made so far (...'forget the forecasts'...) because there are circumstances where you need them.

As an example, if you need a workflow for approving project budgets => then you are with the project budgeting form.

Yet, if you need your project budgets incorporated into the overall company's budget then you have to use the forecast forms because only these forms allow you an automatic transfer to the ledger budget, that is, the budgeting module. Whether this transfer is needed or not is another question and highly depends on how your company creates budget for projects and for the company as a whole.

Another reason for using forecasts is that they are needed if you work with fixed price projects and need to calculate and post the POC estimates.

Overall, I hope that MS can do a consolidation and 'cleansing' of the different budget/forecast features because they can be confusing. Maybe you can add an idea on the dynamics ideas/experience portal for that? I am sure that you will get a lot of votes and a big chance that things will get improved in the next version updates.

Best regards,

Ludwig

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Eugen Glasow 6,359 on at

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Let me correct: "...forget the forecast FORMS..." :)

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Andy_T 330 on at

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Hi Eugen

Thanks for your reply.

I'm a little confused with regards to the 'shadow' forecasts - I can't see where you are able to make them available. Are they only created via an automatic workflow and not a manual one?

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Andy_T 330 on at

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Thank you Ludwig.

I will add an idea to the portal and keep my fingers cross.

The two approaches are just too confusing for users at the moment and I'm sure with a little effort could be rolled up into one more all encompassing feature.

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Eugen Glasow 6,359 on at

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Hi, it doesn't matter: any approved budget or a budget revision creates or updates the "shadow forecasts":

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Andy_T 330 on at

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Ah...I see now. You only see these transactions against 'All' forecasts.

Interestingly - I can enter a budget and click 'details' then breakdown (for example) the hours into multiple lines for different resources but they are the rolled up and applied as 1 hour for the total amount...so budget forecast models only work with amounts and not quantities.

Thank you Eugen

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Eugen Glasow 6,359 on at

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Correct, the quantity is always 1 :( There are some bugs with regards to hours indirect costs too.

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