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Project Time-Cost Statements


Project Time-Cost Statements

This article describes PROJECT TIME-COST STATEMENTS used in D-E Project Accounting

Project Time-Cost Statements  comprise distribution of total Forecast, total Actuals, total Bookings and total Commitments in the project time frame, defined by Project Periods. These statements are unique for Project Accounting, and they have no counterpart in Business Accounting. However, they supply Project Management with the perfect view on the current financial position of the total Project in the time frame of the project duration.

        The structure of Project Time-Cost Statements, as well as Time-Cost Accounts and Time-Cost Ledgers, requires that the total project duration be divided into Project Periods. Project Calendar, established at the Project start, defines all Project Periods. Usually, one  project period is equal one calendar month, but it can be also one year quarter (three months) if the project is of a very long duration and quarterly reports are requested by the Project Sponsors. 

        Project costs comprising ACTUALS, BOOKINGS and COMMITMENTS are distributed between the Project Periods automatically, based solely on posted Journal Entries, and without any need on part of the Cost Engineer to do any data retrieval or calculations. However,  FORECAST costs are distributed according to the data defined individually within each Project Cost Account. They are the Start Date, the Finish Date, and the Distribution Factors F1 and F2, where some input is required by the Cost Engineer; (see our Article #5).  Calculations necessary to establish dollar figures of each cost within every Project Period are called Consolidation ProcedureBecause of the complexity and volume of the calculations, they should be done by the computer. During this consolidation procedure, the computer summarizes period by period the values of all Forecasts, Actuals, Bookings and Commitments of every Project Account within each Project Period. Click here to read more about the Consolidation Procedure.

 Today - either in Business Accounting or in Project Accounting - all bookkeeping is done using computer software. Business Accounting has many computer programs, but Project Accounting has so far only one, TECA, (click here). Therefore, in this article all computer program pictures refer to TECA.

         Project Time-Cost statements are depicted by program screens and reports, supplemented by histograms and S-Curves. These statements are generated usually at the end of each Project Period, and of course, at the end of the Project Itself. In TECA, there are five (5) Total Project Time-Cost screens, from which all Project Time-Cost Statements can be generated:

  1. Costs in Periods, Total Project
  2. Costs in Periods, Cost Accounts (Project Objects)
  3. Costs in Periods, Expense Accounts (Project Participants)
  4. Periodic Costs, Cost Accounts (Project Objects)
  5. Periodic Costs, Expense Accounts  (Project Participants)

Click here to display the Cost Analysis Menu screen of TECA, providing an access to the Project Time-Cost screens. Notice, that there are three blocks of buttons. The right block deals with Project Time-Cost Statements; the left block - with Project Financial Statements; and the bottom block - with Work Progress Reporting and Project Cash Flow Forecast. In this article, we shall be dealing only with Project Time-Cost Statements. Notice the button having red background, entitled FINANCIAL TIME-COST CONSOLIDATION. Clicking this button will trigger calculations and generation of the current time-cost statements, done by TECA and lasting approximately one minute. The date and time of the last consolidation is always displayed above the button.


1. Costs in Periods, TOTAL PROJECT screen shows current distribution of Total FORECAST, Total ACTUALS, Total BOOKINGS and Total COMMITMENTS within all Project Periods. In addition to tabular data presentation on this program screen, there are additional screens and reports comprising the same data in the form of histograms and S-Curves.

Click here for an example of the program screen of the time-cost screen entitled Costs in Periods, Total Project, belonging to the project SOFP - Safanya Offshore Facilities - Stage #3. The main screen shows the costs of Total FORECAST, Total ACTUALS, Total BOOKINGS and Total COMMITMENTS distributed between the 34 Project Periods of this Project. Notice that the current Forecast of 859,327,200 SR (Saudi Rials) represents 93.4% of the Budget, and this happens because the Contingency has not been utilized so far. Clicking on any of the three buttons in the brown "REPORTS" box, will display one report, comprising either Budget v. Forecast, or Forecast v. Actuals, or Bookings v. Commitments. Clicking on any of the three buttons in the blue "GRAPHS" box, will display reports comprising histogram and S-Curves of the Total Project, or Forecast v. Actuals, or Bookings v. Commitments.

Click here to see the report Forecast v. Actuals, and then scroll down to see the related reports showing the histogram and the S-Curves of the same. Click here to see the report Bookings v. Commitments, and then scroll down to see the related reports showing the histogram and the S-Curves of the same. Click here to display the screen of Total Project Histogram, and then scroll down to display the corresponding screen showing Total Project S-Curves. The S-Curves of the total Project indicate that the project is already delayed; this is proven by the Actuals S-Curve that lags well below the Forecast S-curve. The Commitment S-Curve appears all the time above the Booking S-Curve, showing that there was always enough money to pay bills. It is evident that this consolidation was made at the end of Period #14, because the curves of Actuals, Bookings and Commitments appear as horizontal lines during the remaining periods.


2. Costs in Periods, COST ACCOUNTS screen is the typical multi-screen, showing the current (made at time of the Consolidation) distribution of FORECASTS versus ACTUALS for every major Project Object, i.e. Project Cost Account.

Click here for an example of one of the many program screens, entitled Costs in Periods, Project Cost Accounts, belonging to the project SOFP - Safanya Offshore Facilities - Stage #3. This screen shows the distribution of the first-listed Project Object, entitled Diving Investigations and Assistance. You can see the clicked combo, allowing for selecting screens of other Project Objects. Click here, to see the report (and the screen, when scrolled down) of  the major Project Object, entitled Fabrication, Tie-In Platform.  Notice, that at the time of this consolidation, this Project Object was not yet completed, as evident from the Forecast, showing already the Period #13 with the cumulative value of 100%. The value of 92.0% Actuals in the Period #14 implies that the fabrication of the Tie-In Platform will not be completed in the time as planned, and it will be more expensive than forecasted.

By clicking the button GENERIC ACCOUNTS, from this screens, screens of all Generic Cost Accounts can be accessed. Click here to display the report (and the screen, when scrolled down) entitled Cost in Periods - Generic Accounts, showing cost data of the generic account entitled Forecast ENGINEERING Direct. Notice, that at the end of Period #14, the work progress is shown as 39.3%, with the current ACTUALS worth 26,189,888 SR and the total FORECASTS worth 66,711,600 SR.


3. Costs in Periods, EXPENSE ACCOUNTS screen is the typical multi-screen, showing the current (made at time of the Consolidation) distribution of EARNED versus PAID for every Project Participant, i.e. Project Expense Account.

Click here for an example of one of the many program screens, entitled Costs in Periods, Expense Accounts, belonging to the project SOFP - Safanya Offshore Facilities - Stage #3. This screen shows the distribution of the first-listed Project Participant, named Alibaba Contractors, Dhahran, Saudi Arabia. You can see the clicked combo, allowing for selecting display of screens of other Project Participants. Click here, to see the report (and the screen, when scrolled down) of the Project Participant, named Hamman Materials GmBh, Hamburg, Germany.  Notice, that at the time of this consolidation, this Supplier was paid already 16,350,000 SR, i.e. 92.3% of all his submitted invoices, amounting to 17,706,107 SR.


4. Periodic Costs, COST ACCOUNTS screen is the typical multi-screen, showing the current (made at time of the Consolidation) distribution of FORECASTS versus ACTUALS for every Project Period, listing only such Cost Accounts that had some journal entries in the displayed Period.

Click here for an example of one of the many program screens, entitled Periodic Costs of  Project Cost Accounts, belonging to the project SOFP - Safanya Offshore Facilities - Stage #3. This screen shows the distribution of the first-listed Project Period, #1, from 11-01-1991 to 11-30-1991. You can see the clicked combo, allowing for display screens of other Project Periods. Click here, to see the report (and the screen, when scrolled down) related to one of the 34 Project Periods, entitled Period #3, from 01-01-1992 to 01-31-1992. Notice, that at the end of this Project Period #3, the total ACTUALS exceeded the total FORECASTS as much as 10.2% equal 2,215,447 SR, what implies that in this particular period the work progress exceeded expectations. 

By clicking the button GENERIC ACCOUNTS, the multi-screen entitled Period Cost of Generic Cost Accounts can be displayed. Click here to display the report (and the screen, when scrolled down) showing costs in Period #3, from 01/01/1992 to 01/31/1992, for the six Generic Cost Accounts. Notice, that the same value of P=10.2% and the balance of 2,215,447 SR are, and should be, the same figures as these of the Project Cost Accounts.


5. Periodic Costs, EXPENSE ACCOUNTS screen is the typical multi-screen, showing the current (made at time of the Consolidation) distribution of EARNED versus PAID for every Project Period, listing only such Expense Accounts that had some journal entries in the displayed Period.

Click here for an example of one of the many program screens, entitled Periodic Costs of  Project Expense Accounts, belonging to the project SOFP - Safanya Offshore Facilities - Stage #3. This screen shows the distribution of the first-listed Project Period, #1, from 11/01/1991 to 11/30/1991. You can see the clicked combo, allowing for display screens of other Project Periods. Click here, to see the report (and the screen, when you scroll down) related to one of the 34 Project Periods, entitled Period #3, from 01/01/1992 to 01/31/1992. Notice, that at the end of this Project Period #3 only 60.5% equal 14,533,019 SR were paid, compared with the total accumulated Earned Work worth 24,012,006 SR, what implies that either submissions or payments of invoices were lagging. 

By clicking the button GENERIC ACCOUNTS, the multi-screen entitled Period Cost of Generic Expense Accounts can be displayed. Click here to display the screen (and the report, when scrolled down) showing costs in Period #3, from 01/01/1992 to 01/31/1992, for the six Generic Expense Accounts. There are only such generic accounts listed, the cost of which occurred during the Project Period #3. Notice, that the value of P=60.5% and the balance of 14,533,019 SR are, and should be, the same figures as these of the Project Expense Accounts of the Project Period #3.



Remarks

        Time-cost statements of the total Project can be easily generated using the dual-entry computerized method of Project Accounting. Simply by clicking some buttons, and without any need to do any data retrieval or calculations, the Cost Engineer has an access to the wealth of costs data. With minimum of his efforts - requiring maintenance of only four (4) Journals (read Article #3), the Cost Engineer can generate current and reliable reports that will impress the Project Management and the Project Sponsors. He can generate reports,  illustrated by graphs, showing the current status of the total Project, as well as reports describing certain critical Project Objects and objectionable or well performing Contractors and Suppliers.

         The richness of the time-cost data, obtained with minimum of efforts on part of the Cost Engineer, should convince you to apply the dual-entry accounting method in your projects too.        


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