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Project Budget by Period

UPDATE (March 28th, 2018):

Thanks everyone for your comments and great feedback!

From your insights, we can identify two basic ways of working with project budget, which one is the most demanded? A or B below, or both are equally needed? Is that possible that a company uses one or another approach depending on a project, or the approach is usually company-wise?

* Approach A, ENTER BY PERIOD. The users actually plan, approve, and enter the project budget by period, by month, for example. They want to see the reports for budget vs actual monthly to control the project.

* Approach B, ENTER TOTAL, DISTRIBUTE BY PERIOD. The users plan, approve, and enter the entire budget for a project. But, they also want to see the reports for budget vs actual monthly to control the project. They want to see the projection of the budget on the months of project execution. To see the projection, they can distribute the budget amount by periods manually, or apply a formula and make corrections later, for example distribute evenly and then correct manually. They also need to do manual corrections of the budget by month on a regular basis, at the same time the total budget must not exceed the original total. If they need to change the original total, they would do a change order, so that they approve the original budget total + approve change orders = current revised total, which should be distributed across periods for project control.


* * *

Dear partners and customers,

We need your feedback on whether this idea makes sense to you, and whether you are aware of a real business need for this functionality in the system. It would be helpful if you can share examples of user scenarios that involve this feature.

* * *

Idea: Ability to define project budget by financial period.

Once defined, how is this information used further? What are the business scenarios?

Thank you for your feedback.

  • Ekaterina (Kate) Stepalina (Product Manager Project)
  • Mar 26 2018
  • Shipped
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  • Michael Milligan commented
    March 26, 2018 12:23

    Katerina-

    In a PSA or project oriented business, project budgeting by month is the holy grail of business efficiency.  A well run project business regular meets on project status, looking at measures like burn rate to determine if a project will complete on time and budget.  Looking at an annual budget only gives you a historical look at why a project failed or succeeded, a PM does not have the information to be proactive and correct issues before the project is done. 

    I can also say that on every RFP or needs analysis I have ever done for a PSA firm, budgeting by month is always a requirement or need.  I business may not get to it during the first phase of implementation but it is the goal and we will lose opportunities to present if we do not have this powerful feature.

    Ask Todd Kuhns what he thinks about the importance of this feature, he knows the market very well.

    I also have existing customers using Acumatica with this feature and they cannot upgrade until it is restored.

    Best Michael

      

  • Ekaterina (Kate) Stepalina (Product Manager Project) commented
    March 26, 2018 12:40

    Thank you for feedback, Michael!

  • Dilip Bordia commented
    March 26, 2018 13:30

    It is important for non-profit companies to analyze project actuals and budget by month. 

  • Doug Potter commented
    March 26, 2018 17:20

    Katya

     

    I actually have a deal that I'm trying to close by Summer.  They process 200 timesheets each week. They came to the RoadShow in October 2017 and saw this feature demonstrated.  Based on that meeting, they agreed to go ahead with an evaluation (that's been on hold but expected to pick up by late Spring).

    If I tell them the feature is gone, we won't get a deal out of this.  They'll stay in their current system (which is Solomon).

    Doug Potter

     

  • Scott Ward commented
    March 27, 2018 17:31

    Katerina,

    We use project budget by period for our forecasting of revenues based upon project status during the year as well as our monthly revenue recognition process.  As such it is critical to our financial performance monitoring  and provides us with critical visibility into our projected work vs budgets for the year and aids in our strategic decisions.  This element was a requirement of any ERP system we evaluated during our ERP selection process and without it we would not have elected to go with Acumatica.  The loss of this element would set us back during a time when we are in the process of expanding our use of Acumatica from North America to our other key global regions.

    Scott

  • Deanna Stephens commented
    March 27, 2018 17:59

    Hello,

     

    A little bit about our company, we are an independent research company.  We provide research, development and regulatory services to the agricultural chemical, biotechnology and food industries, government bodies and agricultural commodity suppliers. Field and laboratory facilities in over 30 countries.  Our business is based on projects.  When we evaluated Acumatica nearly 3 years ago, and the ability to plan project revenue by financial period was a must have.  We have since fully transitioned to Acumatica in the US and rely on the revenue budget by month to make informed business decisions.  In December 2017, our Leadership team voted to implement the use of Acumatica within all of our business entities globally. 

     

    Prior to initiating the implementation of the Distribution and Organization (Project) modules in EU, we began testing the upgrade.  We quickly realized the ability to plan our project revenue monthly is no longer available.  I have a very hard time believing the project budget by period function was largely unused and would not be missed from the upgrade.

     

    I would be more than happy to set up a conference call with you and anyone else, to review our setup and see how we use and how much we rely on this data.

     

    Since this function is not available in the new version, we have decided not to upgrade at this time.  Our plans for implementing Acumatica within our company globally have been placed on hold.  If this function is not available in the near future, we will be forced to look at other ERP systems that offer this functionality.

  • Denys D commented
    April 06, 2018 12:09

    Hi Kate,

    There are following use cases related to Project Budgets by Period functionality I've come across during implementations:

    1. Long-term projects. Usually are used by government organizations. Project budget can be entered for every Fin Period in the year or only for some of the periods, but it is important for the client to know in which period they are expecting a particular expense to be incurred.
    2. ‎Short-term projects. In some cases clients analyze budget/revised/actual amounts in relation to the Project Completion date. For instance, some of them compare budget vs actual amounts after the Planned End Date of the Project Task.
    3. ‎Sometimes, I have requests to produce a report which compares the following information: GL Budgeted Amount for the Financial Year vs Project Actual data YTD plus Project Budgets for the period from the current period to end of the year.
    4. Fixed Cost projects often require a schedule which can be then used for the billing. In this case one Task is used and the billing schedule should be set, for instance to produce one invoice per quarter. Customers use Project Budgets by Period to be able analyze which amount should be build in a particular financial period.

    Thanks,

    Denys

  • James Morgan commented
    April 12, 2018 09:51

    Hi Kate,

    With regards to your question it seems that the differences between the two options are that in A you don't have the ability to distribute by period and that (possibly) A implies that there is approval for each budget per period.

    In our client cases, the budgets are driven by another planning system or a detailed spreadsheet so they would not necessarily use Acumatica to distribute the budget by period.  An even distribution would be useful as a start and then they could manually adjust each period.At the start of the project most clients would import the period budgets from a spreadsheet.

    Once a project is underway, what tends to happen is that the total budget remains unchanged, particularly the revenue budget, but the timing of the work and the revenue vary.  This happens all the time in a design agency.  What we have found is that project managers revise their period budgets (they refer to them as forecasts) once a week, possibly once every two weeks.   The new forecast as a whole is approved for each job rather than the individual period budget.  The latter would involve too many approvals.

    There needs to be additional functionality in managing these changes both in making the change itself and in approving the change.  We had to develop a feature that does this.  It resulted in the creation of a new form which we referred to as the "forecast".

    The functionality in the forecast screen was as follows:

    - Presents the budget in a grid form with periods running along the columns with a max of 12 - 13 columns and the total.  Each row represents an item within a task.  

    - The first row shows the total actual value for that item/task combination.  This represents the "used" portion of the budget.

    - The third and following rows present the period budgets that exist at the moment.

    -The second row shows the "unallocated" portion of the budget.  This value changes as the user revises the budget in the future periods.  The forecast can be saved if any rows are unallocated but not released.

    - Once it is fully allocated it is made available to be approved (taken off hold) and then released.  Releasing the forecast will update the "Revised" budget.

    This is all to facilitate the project manager who needs a very quick and simple tool to update the budgets without having to get out a calculator and make sure that all changes don't change the final budget.  Often this is done in a group meeting with the team members on the particular project.

    The forecasts are separate documents with their own numbering sequences.  

    The project team can view a GE or report of the future forecasts for their projects before releasing the estimates to make sure that the totals are correct.  Capacity is often a key factor and this combined forecast report enables them to determine when they need to add sub-contractors.

    In addition to this we added the functionality to confirm the final budget for the current period under review and to post the revenue allocation for that period..  In practice, the project manager will assess the future forecast as well as determine what revenue should be taken for the current period.  Adding this feature is very useful otherwise the revenue recognition process has to be run separately and often by the accounting team and this can and does cause problems due to timing.

    Finally we also found that where project teams work on projects that are priced in foreign currencies, the project team preferred to see the budget in the currency of the client.  It certainly makes sense when you are having to balance your changes to a total and that total is the same number as the amount agreed with the client.

    In summary to answer your question:

    Option A with the ability to distribute on new projects.

    Add a forecast transaction to enable regular changes to the spread of the budget but with controls to make sure that the total less already expended is not changed.  Add approval, add reports and add the ability to post the current period budget as the revenue allocation for the month,

     

    .  

  • Eric Ratté commented
    April 23, 2018 14:30

    From my experience, Option B will be the best approach. You could also allow uploading from Excel if need be. It would also make is it similar to GL budget which would make the system easier to understand.

    The projected amount would then be the addition of what has been budgeted + committed amount (internal or external) that has been approved. When a new commitment (internal or external) is created, the approval map could be used and configured when it would exceed either the remainder of the budget when taking into account actuals + committed already approved amounts.

    Further along the road, the same mechanism of approvals and projected amount for project could then be reused for GL, since the mechanism used to establish budgets for projects would be similar to the one for GL :)

  • Joel Gress commented
    April 26, 2018 12:25

    Approach B is what I have seen as most common.

  • Mike Schmitt commented
    May 11, 2018 20:32

    Why was project budget by financial period which was available in v6.1 removed starting with 2017 R2.? We have customers that budget by period.

  • Coen Pretorius commented
    May 24, 2018 03:49

    Budgeting and forecasting by period is absolutely essential for most project driven clients as described in the other comments. Option B will be most flexible and efficient but Option A will be 100% better than no period based budgeting at all. Whatever option is used, manual adjustment of distributed amounts and quantities will be necessary in most cases.


    Budgets and Forecasts are mostly done in Excel simply because it is easier. The ability to export the Acumatica period based budget and forecast to Excel, modify it and import it back into Acumatica would be great.
    For FORECASTING it will be great if the PTD actuals are exported per period with the remaining forecast adjusted accordingly to maintain the totals. 


    If we want to convert some of our existing customers to Acumatica, it will be a showstopper not to have period based budgeting.

  • Rick Van Doel commented
    June 07, 2018 13:16

    Yes we are in the process of upgrading and were taken by suprize that this feature was removed.  We wrote a GI and incorporated it into an Excel report so that our PMs can review and approve the WIP on their projects prior to approving billing.  Some of our PMs manage DOZENS of projects which makes it innefficient to review the budgets tab within acumatica for each project. We will not upgrade until it is restored.

  • Coen Pretorius commented
    June 10, 2018 14:47

    Hi,

    Thank you for the opportunity to give my 2c worth. I will be happy to discuss in more detail.

    A would be a workable option provided the period based budgets could be imported directly from Excel. One could export the valid project, task, acct combinations from Acumatica to an Excel template for completion of the budget/forecast. This will go a long way to ensure the import is successful.

    Generally our clients (engineering contracting) develop the budgets/forecasts in Excel simply because Excel offers more flexibility.

    Ideally revising the forecast should provide a process that:

    1. Shows the current approved period based budget and the current approved period EAC for the full project in “Excel” format. Option to show approved and in progress separately.
    2. Display the PTD actuals+ commitments per period against the CB and EAC – actuals not editable
    3. Allow the results to be exported to Excel where the revised budget can be revised and re-imported.
    4. An additional option could allow authorised users to insert revised CB and EAC for future periods on the PTD version to create the revised EAC.

    The budget revision process should allow one to change the relevant budget/forecast but not approve it without an approved PCO’s. One budget/forecast revision could involve multiple PCO’s – typically some internal, some requiring external approval and some may just be shifting budgets from one item to another.

    Two further issues:

    1. This will provide a budgeted/forecast “commitment” flow but not a budgeted/forecast cash flow. To get to the cash flow one has to apply the invoicing and payment terms applicable to each subcontract. This means that a facility is required to enter the contractual and forecast invoicing schedule per subcontract.
    2. The dates on which various “commitments” are forecast to flow are typically maintained in a project schedule in MS Project, Prima Vera , etc. It would be nice if those dates, for matching project/task combinations, could be imported (after being exported from the planning package) to adjust the dates for the forecast commitment flow. It does, in my opinion, not have to be a fully integrated setup like Dynamics SL connector tried to do.

    Kind regards,

    Coen Pretorius

    Director / Solutions Consultant

    Profound Project Control Solutions (Pty) Ltd

    T: +27 (12) 654 3053 ⌡ M: +27 (83) 30 20 558 ⌡ Skype : coenpret

    CB Center ⌡75 Durham Road ⌡ Clubview ⌡ Centurion

  • Doug Potter commented
    June 11, 2018 01:50

    Approach B
    Formula should only be a simple linear approach. Do this at the task level. Then override manually.

  • Admin
    Feedback Admins commented
    August 08, 2018 16:57

    Acumatica partners and customers: we are having a special Focus Group meeting to review project budgeting by period requirements and see a short demonstration.

    Date/Time: Tuesday, September 18 @ 8:00am PDT / 11:00am EDT

    Application link: https://portal.acumatica.com/event/focus-group-project-budgeting-by-period-online/  (we will limit registration to a workable number of attendees)

  • Doug Potter commented
    August 08, 2018 17:12

    Katya

    We will lose deals if we go into a sales opportunity without this feature. Use Option B, please.

    Спасибо
    Doug Potter
    mbsPartners Newport Consulting
    My LinkedIn Profile
    Office: 714-662-1111 x18
    Cell: 714-390-6249

  • Ekaterina (Kate) Stepalina (Product Manager Project) commented
    August 14, 2018 12:59

    Thanks everyone who took a moment and posted a comment with thoughts and suggestions regarding the feature. Your input is helpful!

    OK, we wil go with Option B. Questions:

    * Which bucket (s) should support forecasting? E.g. revised budget amount, revised budget quantity, any other?

    * How should the system come up with the list of suggested periods for forecasting?

    * Is there a requirement to keep the total of forecast lines in sync with the approved budget defined on the Projects form PM301000?

    * Is there a need to keep different revisions of forecast for reports, e.g. optimistic, conservative?

    * Is there anything else important to consider, which we didn't mention in the description of option B or these questions?

     

    Thanks in advance!

  • Eric Ratté commented
    August 15, 2018 12:19

    Privet,

    Here are my answers/comments in blue.

    1- Which bucket (s) should support forecasting? E.g. revised budget amount, revised budget quantity, any other?

    I guess that the point of adding the periods to budget is not only to be able to monitor if we are on or out budget but also to predict if things goes as they are, will we be able to be on budget. Therefore, not only, original and revised budgeted and actual quantity and amount will have to be split by period but also committed amounts. For me, original budget is what has been approved originally and revised is after a change has been made to the original budget.

    2- How should the system come up with the list of suggested periods for forecasting?

    The first period should be the one associated to the start date of the project while the last should be the one associated with the end date of the project. Periods has to be specific to the branch/company associated with the project. When no branch has been defined for the project, the master financial year should prevail.

    3- Is there a requirement to keep the total of forecast lines in sync with the approved budget defined on the Projects form PM301000?

    Yes, I would imagine that you can have a Distributed amount along with a Distribute function as in the Budgets screen ( GL302010) where a user could specify a total amount that would be split depending on the Distribution Method selected at a pop-up screen.

    4- Is there a need to keep different revisions of forecast for reports, e.g. optimistic, conservative?

    Not from my experience so far. From my experience, you have a budget, build a proposal out of it and track expenses and revenues against it. Change orders will make the budget change if need be.

    5- Is there anything else important to consider, which we didn't mention in the description of option B or these questions?

    a) There may be a need for certain project to use the current behavior e.g. not having to split budget. Then, either an option is added to the project and defaulted by the project template or users would set a budget at the first period of the project.
    b) The ARM functionalities should allow having either a project to date amount, period to date or financial year to date for revenue and expense accounts (and also assets and liability).
    c) Would it be possible to list the non-project code in the ARM of PM type? Would could then compare project related amounts with non-project amounts.
    d) If you could keep in mind that this functionality could be done in such of a way that you could eventually replicate the mechanism of budget validation that is in place for requests against GL budgets to the PO against project budgets (project tasks/item) either by PTD, YTD or project budget, that would be great.
    e) The Auto-budget Time and Material Revenue action should behave according to the cost budget being split by period.

    Spasibo,

    Éric Ratté
    Expert-conseil en intégration logicielle
    Les services SiPD inc. : lauréat du prix Acumatica's Peace of Mind

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    Télécopieur: (450) 933-3791

    Courriel: eric@servicessipd.com Internet: www.servicessipd.com

    [Acumatica Gold Certified Partner logo_JPG]

    ________________________________
    De : Acumatica <25917115333a42c45f55ec2e@mailer.aha.io>
    Envoyé : 14 août 2018 09:30
    À : eric@servicessipd.com
    Objet : Ekaterina (Kate) Stepalina (Product Manager Project) responded to idea ACU-I-1488 Project Budget by Period

  • James Morgan commented
    August 24, 2018 12:28

    Hi Kate,

    I am pleased to see that this is coming back and with some added functionality.

    My answers to your questions:

    * Which bucket (s) should support forecasting? E.g. revised budget amount, revised budget quantity, any other?

    I think it has to be the "revised budget"  doesn't it ?  when looking at a project screen the revised budget will ether be the same as the "Budget" or it will have a different value which is the current revised budget.

    * How should the system come up with the list of suggested periods for forecasting?

    As suggested by Eric, use the date ranges in the project, actually use the task date ranges.

    * Is there a requirement to keep the total of forecast lines in sync with the approved budget defined on the Projects form PM301000?

    Absolutely Yes, by task

    * Is there a need to keep different revisions of forecast for reports, e.g. optimistic, conservative?

    No.  I would keep it simple.  One set of per period budgets.  

    But it is interesting.  You have mentioned the "F" word a few times. 😊 ("Forecasting" ).   A forecast has a number of definitions but in the professional services business which our clients are in, the forecast is a revision of the budget.  Forecasting  is a regular activity.in a busy design agency.  Essentially it is a reassessment of the work that is planned for the next month or or two.  It does result in a change of the period budget. The question for Acumatica is  whether you choose to change the original budget or add a new budget type called "forecast".

    IF you create a forecast document then the behaviour needs to be different. 

    1. A new forecast is likely to be done once a month at the least or possible once a week.
    2. The values in the passed periods (or week) have to be fixed (cannot be changed). These values will be the actual qty and amount values.
    3. The remaining period values can be taken from the budget.
    4. There needs to be a check to ensure that the Total actual to date + unexpired budget do not exceed the total budget. 
    5. The forecast should also be eligible for approval routing.

    * Is there anything else important to consider, which we didn't mention in the description of option B or these questions?

    Yes

    1. One thing that was missing from the previous budget  period functionality was that you could not create an allocation rule or billing rule based on the period budget.  This would be most useful to have.

     

    Here is an example.  You plan to complete a job with the following budget  25 hrs period 1, 30 hrs period 2, 10 hrs period 3 and 20hrs period 4.   the system would prepare the billing or perform an allocation in period 1 for the budgeted 25hrs irrespective of the actual time or the the % complete.  

     

    1. As Eric mentioned the ARMS reports will need to pick up this budget periods and report accordingly when using the PM source.

     

  • Admin
    Feedback Admins commented
    January 24, 2019 12:51

    This feature is available in 2019R1 starting 2019R1 Beta.

    Kate Stepalina

  • Admin
    Feedback Admins commented
    March 19, 2019 16:51

    Shipped in 2019R1.

    Kate