Configuring Project Cost Calculation in Project Settings

If you want to track cost data in a project, you must configure its Financial Management-related project settings.

Note: Project settings are determined by project policies, which are inherited from the project type. Project policies can be locked in place, meaning you may not be able to edit particular groups of settings depending on what project type was used to create a particular project.

To open a project's settings, click Project Settings from the Project Overview page.

The Project Settings page contains policies controlling various aspects of a project. Among other settings, the Cost and Effort policy lets you configure the following:

  • How labor costs are calculated on the project/task level

  • Where users enter data

The Cost and Effort policy also determines how Time Management, if integrated with Project Management, is used to track effort. For more information, see the Project Management User’s Guide or the Time Management User’s Guide.

Note: Actual non-labor costs are not calculated automatically but can be entered manually at any time.

Figure 5-1. Financial Management section of the Cost and Effort policy shows the Financial Management section of the Cost and Effort policy.

Figure 5-1. Financial Management section of the Cost and Effort policy

In the Financial Management section of the Cost and Effort policy, selecting the Enable Financial Management for work plan checkbox enables Financial Management to be used with the project by enabling the subordinate options.

The following options are associated with the project financial summary and are described in Project Financial Summary Settings:

  • Allow capitalized costs on this project. (See also SOP 98-1 Compliance for information about tracking capitalized costs for SOP 98-1 compliance.)

  • Enable Financial Management for work plan.

  • Calculate the forecasted labor costs from the staffing profile.

  • Calculate the actual labor costs from the work plan and time sheets. (Note: Financial Management for the work plan must be enabled.)

  • Allow manual adjustment on the actual labor cost
  • Calculate the actual non-labor costs from the work plan. (Note: Financial Management for the work plan must be enabled.)

  • Allow manual adjustment on actual non-labor cost

Note: Actual values that appear in work plans may not appear in the project financial summary immediately. Cost roll-ups are performed by Financial Management at an interval that applies system-wide. For more information, see Configuring Cost Calculation Intervals.

In the Financial Management section of the Cost and Effort policy, the options not related to financial summary settings must be specified if the Enable Financial Management for work plan checkbox is selected. These options are used to specify automatic calculation or manual entry of planned and actual labor costs on the work plan, described as follows:

  • Planned labor costs on the work plan will be:

    • Automatically calculated based on scheduled effort and rates. Planned labor costs for tasks will be automatically calculated from scheduled effort entered on the work plan and from labor cost rates. For examples of how Project Management calculates these costs, see Cost Rule Example.

      For this automatic calculation of planned labor costs to work, the Use Scheduled Effort during planning option in the Resource Load Settings section, Scheduled Effort in the Work Plan subsection of the Cost and Effort policy must also be selected.

    • Manually entered on tasks and rolled up to summary tasks. Planned labor costs for tasks will be entered on the work plan by the project manager or other user with the proper level of access.

    For either option, planned labor costs in the work plan are automatically rolled up from tasks to summary tasks and from summary tasks to the project.

  • Actual labor costs on the work plan will be:

    • Automatically calculated based on actual effort and rates. Actual labor costs for tasks will be automatically calculated from actual effort entered on the work plan for the tasks and from labor cost rates. For examples of how Project Management calculates these costs, see Cost Rule Example.

      For this automatic calculation of actual labor costs to work, the Track Actual Effort per resource assignment option in the Resource Load Settings section, Actual Effort in the Work Plan subsection of the Cost and Effort policy must also be selected.

      Actual labor costs for tasks can also be automatically calculated from time sheets that users log in Time Management. For more details, see Rolling Up Actual Labor Costs from Time Sheets.

    • Manually entered on tasks and rolled up to summary tasks. Actual labor costs for tasks will be entered on the work plan by the project manager or other user with the proper level of access. For more information, see Manually Entering Actual Labor Costs on the Work Plan .

    For either option, actual labor costs in the work plan are automatically rolled up from tasks to summary tasks and from summary tasks to the project.