WHAT Is financial control? ● PLAN THE SPEND Set the financial targets we want to achieve MEASURE the actual results as we go (regularly) MONITOR these against our targets(and project what will happen) ACT-if necessary
6 WHAT is financial control? • ‘PLAN THE SPEND’ – SET the financial targets we want to achieve • MEASURE – the actual results as we go (regularly) • MONITOR – these against our targets (and project what will happen) • ACT - if necessary
how do we do it? simple diagram TOTAL VALUE PLANNED COSTS TOTAL COSTS PROFITS ACTUAL 卡 PROJECTED TOTAL COSTS COSTS +PROJECTED ACTUAL APROJECTED TOTAL ACTUAL PROFITS VALUE VALUE indicates indicates a a projection comparson
7 HOW do we do it? - a simple diagram RESULTS STANDARDS VALUE COSTS TOTAL VALUE TOTAL COSTS ACTUAL PROJECTED TOTAL COSTS COSTS ACTUAL PROJECTED TOTAL PROJECTED ACTUAL PROFITS VALUE VALUE PROFITS PLANNED indicates a projection indicates a comparison
WHO is involved? Estimator sets cost/price in the first place Commercial managers produce budgets and codes Production staff generate the data Project commercial team measure/monitor Production staff implement actions In other words -just about everyone
8 WHO is involved? • Estimator sets cost/price in the first place • Commercial managers produce budgets and codes • Production staff generate the data • Project commercial team measure/monitor • Production staff implement actions In other words -just about everyone!
Producing the Budget Where do we start? o The tender Tender analysis Price, cost, margin The elements of cost some possible complications
9 Producing the Budget where do we start? • The Tender – Tender Analysis – Price, cost, margin – The elements of cost – some possible complications
Recasting the Tender as Project Budget What are the problems in using the Tender? Late adjustments Commercial adjustments Gross pricing mistakes! Outputs and methods used in the Tender may require review
10 Recasting the Tender as Project Budget • What are the problems in using the Tender? – Late adjustments – Commercial adjustments – Gross pricing – mistakes! • Outputs and methods used in the Tender may require review