The importance of locking budgets

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The following is an example of how it can be detrimental to your business if your budget method within a project is not correct set.

 

The Budget Method should be only ‘locked’ or ‘frozen’ when all of the estimating functions of a project have been finalised, and fully exported to the BOQ.

 

Be mindful, that if you export from the estimating model to the BOQ, this export will adjust the BOQ with the new information from the estimating model.  Pricing of components will be as they were originally in the estimating model, no updates on component pricing will be made, unless the user presses the ‘refresh prices’ buttons in either the estimating model, or the BOQ.

 

It is at this time the BOQ is loaded into the Project/ Accounting/ Budget, depending on the Budget Method settings.

 

Budget Methods

Should you set the Budget Method to “freeze the budget”, then any updates within the BOQ will not be updated into the Project/Accounting/Budget screen, and you will not be able update any information within the ‘original budget’ column.

 

Should you set the Budget Method to ‘modify the budget’ only, then any changes that are made in the BOQ and then saved will update the ‘original budget’ column within the Project/Accounting/Budget screen, and you will have the additional option of manually changing amounts within the original budget column .

 

Should you set the Budget Method to “modify the budget and lock during export’, then any changes that are made within the BOQ, and then saved will not update the ‘original budget’ column within the Project/Accounting/Budget screen. But will give you the additional option of manually changing amounts within the original budget column.

 

The function of setting these settings, should be considered when you have a signed contract and the estimating model / BOQ has been completed (one would assume the BOQ would be the basis of the contract sum – as it is at this point you would be monitoring your profitability / performance of the contract as it progresses through the stages).

 

Should you have incorrect settings within the Budget Method and you create variations on the contract over time, this will have a possibility of changing all information within the Project/Accounting/Budget screen. This may be more concerning if you have manually entered amounts in the original budget column of the Project/Accounting/Budget screen, done variations, exported, and then find all of you information is gone.

 

 

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