👀 Purpose
Plan future cost accruals for Site Setup & Operations accounts/product codes. The purpose of periodizing Site Setup & Operations is to budget expense items for a given account/product code and distribute the budget over a defined period. This provides a clear picture of how costs are expected to occur across different months within the period.
Based on how actual costs occur, you can compare them against the planned figures and, if necessary, adjust future plans as a countermeasure to deviations from the original plan.
🥅 Scope
In the Site Setup & Operations menu, several actions are available. These are listed below and described in more detail in the following section:
Create expense item
Edit expense item
Configure basis for final forecast
Include actual incurred costs
🤸 Actions
Below is a more detailed description of the actions available in the Site Setup & Operations menu.
Create expense item
Click “+ Expense item” in the top-right corner of the page. A window opens allowing you to create an expense item for a given account/product code. By defining a period and a monthly cost, you create a plan for when costs will occur. You can have one or multiple expense items per account/product code.
Steps when creating an expense item:
Link the expense item to an account/product code
Define the period to be periodized
Name the expense item
Advanced: enable auto-approval for selected financial accounts
Enter the total budget for the expense item
Define cost per month
Lock budget
Click Save
Edit expense item
In most cases, an expense item will need to be edited several times during the project period. After an expense item has been created, it is often necessary to adjust costs for individual months, as expenses are rarely evenly distributed across the entire period. Adjustments may also be required as actual incurred costs become clearer over time.
An expense item can be edited in two ways:
Click the pencil icon to the left of the expense item name in the table.
This opens the same dialog used when creating the expense item. Update the input values and click Save to apply the changes.Edit values directly in the table.
Click Edit for the entire table to enter edit mode. Update the relevant cells with new monthly cost values and click Save.
Configure basis for final forecast calculation
When creating a project, you can choose how periodized costs affect the project’s final forecast. Three alternatives are available:
Budget
The defined budgets for the expense items form the basis for the final forecast calculation. Regardless of periodization or actual incurred costs, the budgets determine the final forecast.
Forecast
When selecting Forecast, not all posted values for closed months are included. The final forecast is calculated based on actual costs incurred to date plus future estimates.
Highest
The final forecast is based on the higher value of:
Budget
Forecast
This option represents a worst-case scenario approach to forecasting.
The purpose of these settings is to support different company approaches to how Site Setup & Operations costs should be reflected in the final forecast. Some view periodization as a control tool only, while others expect periodized values to immediately affect the project’s final forecast.
Include actual incurred costs
This option is relevant for users who calculate forecasts based on actual incurred costs.
For each month, you can close the month in the table by clicking the calendar icon to the left of the month. The month will turn green, indicating that the forecast is now calculated based on actual costs for that month.
Hover over the “i” icon next to the amount to view history showing budget, estimate, and deviation for the selected month. The value shown in the cell represents the posted (actual incurred) amount.
💬 Questions?
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