Financial Management policy

This topic describes how to set the Financial Management policy of a program type.

Overview

The Financial Management policy controls the following:

Whether you can view financial information of a program and of the lifecycle entities that are included in the program (if these entities are configured to track this information).
How budget is managed in Program Management.
Whether PPM calculates program actual labor cost from time sheets.

Options

Options of this policy are described as follows:

Option	Description
Allow program manager to override the setting	If a program is created using the program type, this option controls whether or not the program manager can edit the program settings inherited from the program type.
Enable Financial Management for this program	Whether or not cost (and benefit) data from the financial summaries for all the contents (proposals, projects, and assets) in a program is rolled up to the program financial summary. When this option is selected: The program cost graph is visible in program header, displaying program cost and budget. The Cost tab appears on the Program Overview page. The tab: Provides a link to the program's financial summary; Displays program cost and financial information of lifecycle entities included in the program; Enables you to use Earned Value Analysis to compare cost data across projects in the program.
Budget strategy	Enabled only when the Enable Financial Management for this program option is selected. For details, see Choose budgeting strategy.
Calculate the actual labor costs from time sheets	Enabled only when the Enable Financial Management for this program option is selected. When the option is selected, PPM calculates actual labor costs of a program from time sheets that are submitted against the program. The actual labor costs are rolled up to the program's financial summary.
Lock forecast and actual costs of the past months	The options control whether cost of the past months is editable and if not, starting from which day the cost becomes non-editable. They are available only when the feature "Lock Forecast and Actual Costs of Past Months" is turned on by your PPM administrator. For details about these options, see the Financial Management User Guide : Lock forecast and actual cost of the past months.

Choose budgeting strategy

After you enable financial management for a program, PPM adopts bottom-up budgeting strategy for the program by default. You can switch to the top-down budgeting strategy if it fits more to your business needs.

The following table describes how PPM manages budget with different budgeting strategies.

Budgeting strategy	How budget is managed
Top-down budgeting	Program managers estimate the cost that can cover the program and its content, and update the budget for the program. Program managers estimate the cost of each program content, and allocate program budget to the program contents. If allowed by program managers, project (proposal or asset) managers can add budget for projects (proposals or assets), if, for example, they find the budget allocated from the program is not enough. Allow adding budget in the proposal, project, and asset level: If this option is selected, project (proposal or asset) managers can add budget for projects (proposals or assets) if, for example, they find the budget allocated from the program is not enough. Otherwise, projects, proposals, or assets can get budget only from the program. Allow the allocation: If this option is selected, program managers can still allocate a negative budget amount to a content even when the negative budget amount would reduce the content's total budget to be less than 0. Prevent the allocation: If this option is selected, program managers cannot allocate a negative budget amount to a content when the negative budget amount would reduce the content's total budget to be less than 0.
Bottom-up budgeting	Program managers estimate the cost of the program, and update the budget for the program. Project (proposal or asset) managers estimate the cost of the projects (proposals or assets), and update the budget for the projects (proposals or assets). PPM rolls up the budget of projects, proposals, and assets to the program.

Budgeting strategy

How budget is managed

Top-down budgeting

Program managers estimate the cost that can cover the program and its content, and update the budget for the program.
Program managers estimate the cost of each program content, and allocate program budget to the program contents.
If allowed by program managers, project (proposal or asset) managers can add budget for projects (proposals or assets), if, for example, they find the budget allocated from the program is not enough.

Allow adding budget in the proposal, project, and asset level: If this option is selected, project (proposal or asset) managers can add budget for projects (proposals or assets) if, for example, they find the budget allocated from the program is not enough. Otherwise, projects, proposals, or assets can get budget only from the program.

Allow the allocation: If this option is selected, program managers can still allocate a negative budget amount to a content even when the negative budget amount would reduce the content's total budget to be less than 0.

Prevent the allocation: If this option is selected, program managers cannot allocate a negative budget amount to a content when the negative budget amount would reduce the content's total budget to be less than 0.

Bottom-up budgeting

Program managers estimate the cost of the program, and update the budget for the program.
Project (proposal or asset) managers estimate the cost of the projects (proposals or assets), and update the budget for the projects (proposals or assets).
PPM rolls up the budget of projects, proposals, and assets to the program.