Cost Plan vs Project Budget

atommag · ‎03-31-2020

Dear All,

I am looking in the online documentation for the more detailed definition of what is called as Cost Plan and Project Budget to understand the intended use of these functionalities.

As far as I understand the finance world:

* cost plan is an estimate by someone that is able to provide such an estimate

* budget is what is approved to be utilized

Important difference that I see in the documentation is that:

* cost plan: can be created by project manager

* project budget: can be created by portfolio manager i.e. I would guess that it would reflect amount of money that portfolio committee approved. in case of the iterative funding project budget < amount in cost plan.

Could you help to understand?

Thank you in advance.

petrb · ‎04-01-2020

Cost Plan is an expense, such us: software licenses, labour etc. ever resource plan are converted after soft/hard booking into cost plans.

Arvind Singh Ra · ‎04-01-2020

Hi atommag,

If the project does not have any cost plan associated, then project budget is distributed by honoring planned start and end dates of the project.

If the project has any cost plan associated, then project budget is distributed by honoring the cost plan fiscal periods.

Project Budget: It is used to set the budget of a project according to the fiscal years.

Cost Plan:It is used to specify the unit cost of a cost type for a fiscal period.

For More info:

https://community.servicenow.com/community?id=community_article&sys_id=9e5ce6a1dbd0dbc01dcaf3231f961...

https://docs.servicenow.com/bundle/orlando-it-business-management/page/product/project-management/ta...

Mark ✅ Correct and 👍 Helpful based on the impact.

Warm Regards,

Arvind

Sanjiv Sachdev · ‎04-01-2020

Hi,

I have used demand as the basis of my explanation but it still holds true for project.

Yorkshire Analytics

If appropriate please mark Correct and/or Helpful.

Ben Barrow1 · ‎04-01-2020

I look at cost plans as the current estimates of what will be spent to complete the budget. As more and better information becomes available, the project manager updates cost plans to reflect the current estimates.

The project budget is the amount that has been provided by the portfolio manager to accomplish the project objectives. It is the ceiling to my spending. As I update my cost plans, I use the project budget as a tool to determine whether we are on track to complete within the budget constraints. If not, we either need to look at where we can make adjustments to stay within the constraints or put in a project change request to the portfolio manager for more funding.

This makes it very important to keep cost plans updated with the most current information. When this is done, I can act early and stay within the budget provided.