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Last time I’ve introduced an explanation of Cost to complete methods by starting with From cost template (see here). Now let’s review the next methods.
The easy ones to understand
As previous estimate
If you want to apply the previous cost to complete methods that ran the last time, choose it. Of course, it has any interest only if it’s not the first time you run an estimation for the current project.
Set cost to complete to zero
You would use that method when you need to finish your project. In other words, when you consider your project is finished, you will not post any additional transaction, this method will put to 100% percentage complete your project, no matter the forecast, the wbs, the posted transaction.
It’s mandatory to have a 100% percentage complete value to run the elimination of the project, which is the last step to run on fixed-price projects.
Without any forecast needed
Now let’s focus on methods that don’t need any forecast.
Total cost – actual
This is a manual method, that can be used directly when running an estimation or through cost template (with Quantity or Cost Amount completion based on value and the Total cost – actual value setup on lines).
It’s going to compare the actual costs against the total costs. By default, when you run with this value, the percentage complete is setup to 100%.
Click on Cost estimate to see the detail for each transaction. Here you notice that you adjust the amount or the quantity (Total cost or Total quantity) and save it. Note that you cannot do that with any other method than this one.
In here I’ve updated the Total quantity from 1 to 10.
Going back to the estimation an click on Calculate.
And here the result is updated to 10%.
Work progress percentage
Already explained in the previous post, but quite briefly. Here is a recap.
A WBS has to be created for the current project, and here we will compare the posted transaction against what is budgeted in the WBS.
Cost template is setup to quantity.
By running the estimation :
We’ve got 1% completed, explained by the fact that 2 hours have been posted against 200 in the WBS.
If I’m updating the cost template with cost amount value instead of quantity, the result would be 100% because the cost to complete method in the cost template line is linked to the forecast (and no forecast is setup).
If I’m updating the cost template with the straight line value, the result would be 49,15% because the duration is 2 months.
In conclusion, the cost template setup is prior to the cost to complete method chosen when running the estimation.
Let’s talk about the last two methods in the next and last post.