Overview
Budget changes are essential in tracking any changes to your approved budget. This helps ensure every dollar is accounted for within your project budget. This article will discuss how to create a budget change, including transfers between existing cost codes and adding or reducing the overall budget.
Pre-requisites
To create a Budget Change, your Project Budget must be fully approved. This means your company has internally approved it, and you have recorded client approval. Otherwise, you will not see the Budget Changes tab. For more information on how to manage and approve your budget, please see Approving the Budget.
Process
Creating a Budget Change
Once your master project budget has been marked as approved, click on Budget Changes tab in the upper left corner of the budget.
2. Click the button on the top right corner Add New Budget Change
3. Select the Budget Change Category, Reason For Change and the corresponding Description:
There are three options for the Budget Change Category, and listed below are corresponding options for Reason For Change:
Non Contingency Budget Reallocation
Budget Scope Gap — Transfers of budget between line items without the use of contingency to cover missed project scope
Backcharges – Transfers of budget between line items for items within the original project scope of which the budget was missed without the use of contingency
Contingency Reallocation
Budget Scope Gap — Contingency use to cover missed project scope
Change of Project Scope — Contingency use / return for Owner driven scope adds or deletes
Design Change — Contingency use for changes driven by Architect or Engineers design development / E&O
Purchasing Buyout — Contingency use / return for savings or busts at time of buy
Field Conditions — Contingency use for items occurring in the field regarding logistics and coordination
Schedule — Contingency use for schedule acceleration / claw back
Force Majeure — Contingency use for an event or effect that could not be reasonably anticipated (i.e. labor strike, pandemic)
3rd Party Actions - Contingency use for changes driven by outside party
Project Scope Revision
Change of Project Scope - Stakeholder one sided increase or decrease to the total budget (no use of contingency)
4. Once reasons are defined, you have the option to upload a supporting document.
5. Go to the Budget Line Items tab. The first cost code you will select is the scope that will have funds moved from, and the second cost code will be the scope that will have funds moved to. In the example below, since it is a Project Scope Revision, we are adding funds to the Project Budget as a whole, and specifically putting it towards Construction - Interiors. You can add as many line items as you need to by clicking Add Line Item. Once you are done, click Save as Pending.
Note that you can use the Calculations function. A window will pop up, where you can input unit costs and quantities, as shown below:
IMPORTANT TIP: You will never need to enter a negative dollar amount. If you are looking to decrease a line item, simply enter the net budget change you would like to see. For example, if you are looking to decrease the Professional Design Services budget by $13,000, you would enter the information as shown below.
Once you hit save, you will notice that the net change amount is $13,000, and your budget for Professional Design Services has now decreased.
6. Once you click Save as Pending, you will be prompted to confirm. This will automatically post the budget change onto your Project Budget / ACR under the Pending Changes.
Reverting back to draft, Rejecting, or Exporting for Authorization
Once saved as pending, you will have a few options. Click on the Actions button on the top right corner, and you will have the option to Export Authorization, Revert Back to Draft, or Reject. Exporting Authorization will allow you to obtain signatures on a PDF for this Budget Change. You also have the option to Approve, which will effectively confirm the budget change and move these funds into the Approved column.
Deleting a Budget Change
To delete a budget change, it must be in draft status. Once it is in draft, go back to the listing page, and click the 🗑 trash icon to delete.
