Top down budgeting

 

If you have come directly to this topic, you may first wish to review the topic Fee Allocation.

 

Top down budgeting is suitable in the following scenarios.

 

Scenario

Use Budget Type

I already have a project budget fee and need to identify budget costs available based on a target profit margin.

Resource calculations - Top down

Non-Rec. calculations - Top down

I already have a project budget fee and need to identify expected profit margin based on calculated budget costs.

Resource calculations - Top down

Non-Rec. calculations - Top down

I already have a resource budget fee but need to calculate my non-recoverable fee element based on anticipated costs in order to set the overall project fee.

Resource calculations - Top down

Non-Rec. calculations - Bottom up

 

 

  1. If you core project fee is based on the percentage of an overall contract value, complete the Contract Value and the % of Contract Value fields to calculate your Core Project Fee.

  2. If your core project fee is not linked to a overall contract value, leave the Contract Value blank and directly enter the Core Project Fee.

  3. If you wish to budget an element of your fee to non-recoverable expenses, enter either the value directly into the Allocated to Non-Recoverable field, or enter a percentage value and select from:

 

With the exception of Fixed Cost, you can either enter a budgeted value directly into the Allocated to Non-Recoverable field and the percentage will be calculated, or you can enter a percentage figure to calculate the expenses fee.

 

However, note that unless the Fixed Cost selection is made, the budgeted value will continue to automatically update in line with changes to the assigned percentage selection.

 

  1. The Allocated to Resource fee element will automatically calculate based on the Core Project Fee less Allocated to Non-Recoverable.

  2. The Variations budget will remain at 0.00 unless tasks in the Budget excluding non-recoverable section are ticked as a variation, whereby the Resource Fee £ and Non-Rec. Fee £ will contribute to these values.

  3. Use the Fee Notes popup to record any notes related to the total project fee.

Budget excluding non-recoverable

  1. You can now start allocating fees to your top level tasks. If you wish to split your fees by percentage, choose whether to set the Resource Fee % as a percentage of Fee Allocated to Resource or Contract Value.

 

 

  1. Enter the Resource Fee % you wish to budget to this task.
    The Resource Fee £ will automatically calculate.
    Alternatively, enter the Resource Fee £ and the Resource Fee % will automatically calculate.

  2. Enter the Resource Cost % you wish to budget to this task.
    This is the percentage of the resource task fee you anticipate spending to deliver this work.
    The Resource Cost £ will automatically calculate.
    Alternatively, enter the Resource Cost £ and the Resource Cost % will automatically calculate.

Note: To help with resource fee and cost budgeting you can use the Resource budget calculator.
             Click the icon to access this feature.

 

  1. The Resource Margin % and Resource Profit £ will automatically calculate.

  2. Use the Fee Notes popup to record any notes related to this task budgeting.

  3. Repeat steps 2-5 in order to complete budgeting for all tasks.

  4. Total Core Project Fee task values will be automatically calculated below your task budgeting.

  5. If adding Variations to the project budget, identify these by ticking the Variations check box to the right of the task name.
    This will remove the Resource Fee % column allowing you to budget these tasks separately from the core resource fee.

  6. Total Variation task values will be automatically calculated below your task budgeting.

Budget including non-recoverable

  1. You can budget for non-recoverable elements of your fee.
    This would typically cover an element of the fee that you wish to apportion to expenses.
    If you wish to split your fees by percentage, choose whether to set the Non-Recoverable Fee % as a percentage of Fee Allocated to Non-Recoverable or Contract Value.

  2. You can choose to Lock Non-Recoverable Fee % to Resource Fee %.
    This has the impact of removing the ability to set the Non-Rec. Fee % and Non-Rec. Fee £, automatically replicating the percentages as per Resource Fee %.in order to set your non-recoverable fees.

  1. Assuming you have not used the lock option described above, enter the Non-Rec Fee % you wish to budget to this task.
    The Non-Rec. Fee £ will automatically calculate.
    Alternatively, enter the Non-Rec. Fee £ and the Non-Rec. Fee % will automatically calculate.

  2. Enter the Non-Rec. Cost % you wish to budget to this task.
    This is the percentage of the non-recoverable task fee you anticipate spending to deliver this work.
    The Non-Rec. Cost £ will automatically calculate.
    Alternatively, enter the Non-Rec. Cost £ and the Non-Rec. Cost % will automatically calculate.

  3. Repeat steps 3-4 in order to complete budgeting for all tasks.

  1. Total Core Project Fee task values will be automatically calculated below your task budgeting.

  2. If Variations have been added to the project budget, this will remove the Non-Rec. Fee % column allowing you to budget these tasks separately from the core non-recoverable fee.

  3. Total Variation task values will be automatically calculated below your task budgeting.

 

Once budgeting for resource and non-recoverable elements of the fee has been completed, you can review your Total Budget Profit.

 

 

 

 

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