Budget and Controls - Overview

Modified on Wed, 30 Oct at 1:50 AM

The 'Project Budget' feature lets general contractors maintain a budget for the entire project and track the expenses. The budget includes the contract-based cost allocations for various divisions of work covered in the scope. Cost tracking and management is a significant and critical function for a general contractor's project manager. Once the original budget is set, any subsequent additions can be made only by the change order process. This function allows a general contractor to always be on top of project costs.

Each line item in the budget requires the amounts allocated under various cost types like the material, labor, equipment, and overheads linked with the cost code corresponding to the work or task mentioned in it. Each line item is assigned to the respective subcontractor in order to keep track of the estimates given by the subcontractor on the respective cost code. Linarc accepts the estimates from the subcontractors only if the total estimate value is less than or equal to the sum of funds allocated for the items assigned to the respective subcontractor. If any discrepancy occurs in the estimate, the subcontractor is advised to revise their project estimate to keep the sum within the allotted funds in the original budget.

Linarc's Budget module allows you to create the original budget by importing from an Excel file in a prescribed format. The project manager can download the template and enter the values in order to develop the budget exhaustively, covering all the work required from various trade/specialty contractors.

The finalized budget can be saved to the console as a draft, allowing the project manager to make essential adjustments. These may include adding new line items or sub-line items, reallocating funds between sub-line items, assigning line items to subcontractors, and specifying contingency percentages for each line item. Once all changes are made and the budget is complete, it can be locked to establish the baseline for the project.

Once the budget is locked, you cannot edit the original budget values, add sub-line items, change the assignee, or delete any line items. Any further modifications to the budget can only be done by adding change orders to the project.

The total costs of the change orders are added to the budget upon their approval by the general contractor and the owner/developer. This lets project managers keep track of deviations, make necessary decisions at various stages, and predict the cost at the time of completion should the project overrun the budget. You can view the change orders added to the budget from the 'Budget' > 'Change Orders' screen.

Prerequisite

The 'Budget' module only accepts the project budget if the cost code for the work in each line item matches with the corresponding entry in the master task code list at the company level. In usual practice, the category/task codes in the CSI 50 division master format are used to define cost codes at the company level. However, some companies use their custom cost code structure. Please contact your company administrator to ensure that all cost codes you apply to a budget are on the master task code list.

Note:
Only the general contractor can create and manage the project budget. The subcontractors can only view the budget amounts allotted to them on their budget module.

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