How are people forecasting FUTURE total project costs and profit when actual hours/expenses are exceeding plan but you can't borrow planned hours from future tasks? | Community
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BradCr
Level 2
July 18, 2020
Question

How are people forecasting FUTURE total project costs and profit when actual hours/expenses are exceeding plan but you can't borrow planned hours from future tasks?

  • July 18, 2020
  • 2 replies
  • 759 views

My company is a consulting agency that works for a fixed fee amount (vs say an attorney who just bills whatever hours they work). We plan hours and expenses to arrive at a price, and our clients pays that amount whether we work more or less than the plan.

Obviously not all projects go as planned, and some require more hours than planned. So I'm trying to determine how to forecast the eventual total project costs while mid project- this is generally done by adding the Actual hours and expenses to the remaining planned hours and expenses. (that is NOT the same as subtracting Plan from Actual)

Has anyone else solved this? How do others forecast fixed fee project costs or profitability before the project is complete?

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    2 replies

    Doug_Den_Hoed_AtAppStore
    Community Advisor
    Doug_Den_Hoed_AtAppStoreCommunity Advisor
    Community Advisor
    July 19, 2020

    Hi Brad,

    I suggest you use the built in Baseline features to capture and preserve the original scope (and profit), and adjust your planned hours as you learn more (but earn less) as your forecast, Baselining periodically as you go.

    I have more ideas along that line, but will first pause to confirm Baselines seem like a fit.

    Regards,

    Doug

    B
    BradCrAuthor
    Level 2
    July 20, 2020

    Hi Doug!

    First, thanks for trying to help!

    I am using Baselines. Although as far as I have found that only captures Revenue/Cost at the task level, not the project level. (I know it captures hours at the project level.)

    Also, while I do adjust hours as a project progresses, using Planned hours does not work for comparing vs baseline unless I am manually changing all PAST planned hours to match actual billed hours. On a large project that is unmanageable- Unless there is a feature that does this automatically?

    Super simple example:

    Project Baseline: 3 hours Total

    Task 1 (last week): Plan was 1 hour; Actual billed: 2 hours

    Task 2 (This week): Plan is 2 hours, will still need 2 hours so I can't reduce

    My Plan still matches my Baseline, which implies I'm on budget.

    But in reality I will be 1 hr over budget for the project.

    This example also doesn't factor in various charge out rates for different roles OR plan vs actual expenses.

    So what I really need is a PROJECT level financial comparison of

    baseline costs vs (Actual costs + FUTURE Planned costs)

    This is what I really need help calculating. Any ideas?

    I am getting a little closer to solving this, and will share if I figure it out. Any help is appreciated!

    One related problem- is there any way to filter ONLY ONE field in a report using text mode?

    (again, I'm new, so it's entirely possible that I'm misunderstanding how to use some basic features that do all this...)

    thanks

    Brad

    Doug_Den_Hoed_AtAppStore
    Community Advisor
    Doug_Den_Hoed_AtAppStoreCommunity Advisor
    Community Advisor
    July 27, 2020

    Hi Brad,

    I invite you to review our Capital Tracking and Budget Vs Actual solutions first, for context. Both pertain to project tracking (in either graphical and numerical format, respectively). If either seems like a potential fit, I'd be happy to chat further at doug.denhoed@atappstore.com

    That said, right you are: until you re-set the plan to the projected values, your baseline and plan will still match, giving you a false sense of security about being on track. If you'd rather not take that (somewhat drastic, in that it obscures the original plan) step, you might consider adding some type of "revised plan" or "additional costs" via either extra (out of original scope) Tasks and/or custom data...but you'd then have to noodle out some reporting that would integrate that extra data, which is why I decided to introduce our ready made solutions.

    Oh, and either way, if you could provide some more details about what you meant by "filter ONLY ONE field in a report using text mode", I'd be happy to assist with that, if I can.

    Regards,

    Doug

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