How To: Budget Item Phasing Usage
Posted on: May 28th, 2012 by

Phasing is a technique by which a budget’s value is spread across a defined time period. This allows a single value to be divided into chunks to appear within the project’s reporting periods. For a simplified example: the material spend on a capital project does not occcur in a lump-sum at the beginning of a project. More likely is that the spend of the materials budget will occur in an S-shaped profile, with the budget being spent most rapidly towards the middle of the project. CostMANAGER supports both automatic and manual phasing to allow you to describe the distribution of your budget values.

How Kildrummy® CostMANAGER can help you phase your data

CostMANAGER has a series of built-in and customisable options that allow you to phase your data in a way that suits you and your company’s goals.

In the following example, I’ve created a pair of budget items on one of our input screens. You can see these as “B1″ and “B2″, both of which have a Control Budget of 2500. You’ll note that under each of the budget items we’ve also expanded down to the Phasing level. By expanding to this level we can see exactly how CostMANAGER has phased our data or how we have phased it ourselves using manual phasing.

On each of the Phasing rows, you can see which phasing method was chosen. You can also see that on the manual phasing row we’ve entered values on certain months to get to our value of 2500. When automatically phased, CostMANAGER will use your value and the profile you have chosen to calculate the values across the periods. Period types are user-defined, with typical examples being: weeks, months, quarters and years.

Graphing your phased data

This first image shows a series of automatically phased graphs using different profiles. Using linear auto-phasing CostMANAGER has calculated each month incrementally to give a smooth line across all our periods.

The next two graphs illustrate how changing the profile of our budget item affects the outcome of our phasing calculations and therefore our graphs. The first graphical report is using a “Bell” curve, and the second is using a “Front loaded” curve, which allocates more of the budget at the start, and less at the end.

The straight red line towards the middle of the graph is the “Now Date” line which  represents the date used for associated date-based calculations; e.g. exchange rates. This date can be adjusted to simulate alternative reporting dates and see how phasing affects your budget

The next example is a manually phased graph. This particular graph has been plotted using the values of the manually phased B2 budget item.

But what happens if our particular project gets delayed by a month and we’re using auto phasing? In CostMANAGER, that’s not a problem. You can manually phase a particular period, adjust your budget and the application will continue automatically phasing the rest of the budget as you originally planned.

You can create your own profile curves using CostMANAGER Enterprise to automatically phase your data as required.

If you have any questions in regards to Budget Phasing or CostMANAGER’s other features please contact us.