A risk provision that comes with the estimate on a separate production code sits in AIMZ as an ordinary budget. Since contracts are normally not placed on such a code, the budget drives the final forecast, and the full provision counts as cost. When you need to use the pot, move the amount with a transaction from the risk code to the code where the cost actually occurs.
How to use the risk pot
Go to Prod. codes and open the production code that needs the funds, or the risk code.
Click Transactions above the overview table on the right.
Move the amount from the risk code to the other production code, and write a description of what it relates to.
Save. The revised budget is adjusted down on the risk code and up on the receiving code.
Good to know
The contribution margin assumes the full provision is used. This is a conservative way of reporting.
If you also enter uncertainties on other codes, they come in addition to the provision.
A transaction changes the revised budget, but not the total final forecast, until the budget on the risk code is actually reduced.
If you place a contract on the risk code, the contract replaces the budget in the final forecast.
Use transactions instead of just adjusting the provision down. That gives you a history of where the money went.
Additional orders are not risk
Additional orders from the client should be registered as change orders, not taken from the risk pot. If these are mixed, the figures become hard to explain in financial meetings.