Your Quick Guide on Project Budget Management Within OpenAir

Project budgets are a key planning tool for project management to ensure your delivery is on track and within cost.  By rolling up project budgets across your professional service organization, you gain visibility into how backlog will be delivered and what type of resource demand is required to meet that delivery plan and your overall business goals

There are three types of budgets available in OpenAir, each with its own objective and role in project management:

1. Basic Budget

The first of the three is simple money and hours fields.  It answers the question of “what is the value of this project and how many hours should it take to deliver”.   It’s good for smaller projects and repeatable solution delivery or to support a percent budget burn project management measure.   The basic budget feature is found on the properties page of a project in the ‘Projects’ module. The simple flow to use it would be: 

• Type your dollar value into the budget money field and hours value in the budget hours field
• Standard fields are visible from project list views without running reports such as budget and budget versus income for burn visibility.  
• Standard fields are also available in reports or you can create your own custom calculations for reports using the Project budget detail field.

The downside of the basic budget feature is that it holds a single value.  If your projects often handle change orders to increase funding, there is no visibility into changes to the budget over time without running a project audit trail.   The basic budget feature is also unable to show how the budget may be split out such as the case of labor vs. expense type funding.

2. Transactional Budget 

The transactional budget feature allows you to breakdown your budget into components that represent your budget.  Each component can be categorized by a budget category, a customizable list within your OpenAir, to track types such as labor and expense and even whether funding is initial or change order-driven.   The services field, which is a key common field relating hours and financial together throughout OpenAir, can even be associated to a budget transaction to relate budget types to detailed billing and time reports.  Each budget transaction has a date which represents when the funding was received for comprehensive visibility of budget vs. actuals reporting views.

This feature is found under the Financials menu within a project under the menu option ‘Budget’.   The simple flow of using this feature would include

• Create a budget transaction for the desired category and/or service with a money amount and date.  
• Repeat the budget transaction creation for as many components as needed.
• The combined value of all budget transactions is reflected as a total budget money value on the Project Properties page, allowing you to use the same standard fields as mentioned above in the Basic Budget feature.
• As funding changes occur, such as change orders, create additional budget transactions.
• Reports can include the Project –>Project budget standard field to support total and over time trending of budget changes and delivery effort.

If you are not seeing the budget option under Financials in your system, it must be enabled by project stage.  If you don’t have the option to enable it in a project stage, then the feature itself needs to be enabled which needs to be done by NetSuite.   Ask to enable the Transactional Budget feature.

3. Project Budget 

The third type of budget in OpenAir is the feature called Project Budget. Its primary function is to serve as a cost planning tool with some billing aspects; however, due to the multiple options and flexibility of this feature, it has the capability of being configured to support a variety of budget planning approaches.

At a basic level, the Project Budget feature supports the planning of hours and cost by category such as labor, expenses, and purchases.  Labor is planned by a standard category of service or job code, which aligns with bookings or task assignment scheduling approaches. Expenses and Purchases are planned by reusing the configure respective item lists for the ability to be extremely detailed on costs or flexible to establish a process for more general cost planning.  Billing is handled by entering default uplift percentages or overriding uplifts per budget entry.

A main advantage of the Project Budget feature is that it is presented as more like a spreadsheet with built-in functions like ETC/EAC calculations, which aligns to many project manager homegrown MS Excel spreadsheets and therefore feels comfortable to use.   

More details about the project budget feature are:

• Multiple Versions Can Be Saved: An initial budget can be established then it can be cloned for modification to try out versions or manage changes over time.  You can establish a baseline budget for reporting and run reports as well as in-feature comparison views to see changes between budgets.
• Approval Workflow: Project Budgets can be submitted for review/approval to support proposal planning, project cost planning, and more.   This promotes visibility outside of the project manager.
• Only One Approved Budget Can Exist – All prior approved budgets get automatically archived 
• Supports Variance: In-feature plan vs. actual data views provide variance reporting. 
• Custom Calculation: Standard reporting values are available for use in custom calculations to support a wide variety of reporting needs.

Transactional and Project Budget Features Complement Each Other

The Transactional Budget feature is for customer funding or revenue, whereas the Project Budget feature is a cost planning tool for the delivery of a project, with an element of billing anticipation.

The two features really complement each other.  The former asks questions like “What did we sell, and how much?” and “What will I earn as a company?”.  The latter asks the question of “what’s the cost to deliver the project?” and “How will the cost be incurred over time?”.

Combining these two budget features helps you paint a bigger, fuller picture. You can see your revenue targets, cost planning and forecast, compare plan vs. actual costs, and compare planned billing and earnings. 

Uses Cases and Feature Use

To help you decide which features may work best for you, let’s take a look at some use cases:

1. Tracking initial funding budget and change order funding

• Which Feature to Use: Transactional Budget for the breakdown of funding components and categories.
• Representational date:   Budget transaction has a date to represent when the change order was received 
• Budget Category: You can use ‘Budget Category’ to discern original funding and change order funding
• Service Field: Ties related objects together such as time, billing, revenue and budgets into the same report
• Reporting: Your Project Budget field will display the budget amount per defined periods 

2. Costing Plan with Pricing Proposal

• Which Feature to Use: Project Budget is a good option for this since it’s very much like an estimation in the spreadsheet (which many of you might have in your sales cycle). 
• Budget Feature: If you don’t use a costing system or a sales tracking system, the Project Budget feature could handle this.
• Multiple Versions: The Project Budget feature supports versioning and enablement of approved cost baseline for initial tracking.   You could have an initial estimate, then create versions to support scoping variations. When the final version is determined, indicating it as a baseline supports reporting.

3. Resource Plan Changes Over Time

• Which Feature to Use: The Project Budget feature relates to your resource scheduling by importing current scheduled hours overtime.   By creating a budget at various points in time, you can compare scheduling ‘snapshots’ to view how schedules have shifted or changed.   
• Solution Involves Two Scripts from Top Step: Top Step has created a solution that automates the capture of project budget resource plans with two scripts: Enable ‘auto-create’ to capture the initial project budget based on bookings (focus on hours, not rates) and the Top Step booking import script. 
• Project Dashboard Reporting: Allows you a view of project budget hours by time period, such as weekly, and compares each budget to view changes and trends. 
• Pro Tip: Add color-coding to the comparison report to see the changes! 

Utilizing Project Budget Management in OpenAir

With the variety of budget features in OpenAir, you have many options at your fingertips.   Take the time to review where budget plans would help or fit within your professional services organization then determine which features would best support defined processes. And remember – you can always refer to Top Step’s comprehensive resources!

To learn more, watch our video on Project Budget Management in OpenAir.