Skip to content

Project Budget

In ITM Platform, projects and services have both top-down budgets (manually defined) and bottom-up estimates (calculated based on task and resource allocations). A project’s budget typically includes:

  • Hours (internal team, external team, or unassigned).
  • Procurement or purchases (external invoices, materials, etc.).
  • Revenue (if applicable).

You can track these elements in the project’s Budget tab, which is located by navigating to:

MANAGEMENT > Projects > [Select a Project] > Budget

Budget Tab Structure

The Budget tab is divided into four blocks:

  1. Top-Down Budget
  2. Manually edited by clicking Edit top-down budget.
  3. Enter hours for internal, external, or undefined teams.
  4. Specify cost, purchases budget, and revenue (if applicable).

  5. These amounts represent the funds allocated to the project, including any revenue used for revenue recognition.

  6. Bottom-Up (Estimated) Block

  7. Reflects the detailed cost of hours and purchases based on project tasks and planning.
  8. The system calculates these values as you plan tasks and allocate resources.

  9. Shows the sum of hours multiplied by each resource’s standard cost, plus any estimated purchases.

  10. Actual Values

  11. Displays real costs, based on:
    • Time entries logged by the project team.
    • Actual purchase costs (invoices).
    • Revenue actually assigned.

  12. Updated in real-time as team members track hours and invoices are recorded.

  13. Closed Values

  14. Shows the budget figures at the last close (if the project has ever been closed and reopened).
  15. Used for comparing the final budget at closure to ongoing costs if the project is reopened.

Additional actions in the Budget tab include:

  • Setting a new baseline for comparisons.
  • Changing the project’s bill rates, which affects cost calculations across the entire project.

Budget vs. Estimated Cost

Top-Down Budget

A budget (top-down) is the maximum amount of money assigned to a project, often decided before the project is fully detailed. It can be defined as:

  • Total hours (internal, external, undefined) multiplied by a cost rate.
  • Purchases budget (external resources, materials, etc.).
  • Revenue (if relevant to the project).

Entering these figures in the Budget block indicates how much the organization is willing to allocate to the project.

Bottom-Up Estimate

The estimated cost (bottom-up) is calculated by the system once tasks, efforts, and resources have been planned. For example:

  1. Assign tasks and estimate the hours each resource will need.
  2. Each resource has a standard cost based on a professional profile (internal or external).
  3. The system automatically multiplies the hours by the corresponding rates.
  4. Add any estimated external purchases.

The sum of these calculations produces the bottom-up estimated cost. This helps project managers see whether the project can stay within the top-down budget.

Differences Among Budget Columns

Within the project’s Budget section, you will typically see three main budget columns (plus a possible closed-values column):

  1. Budget (Top-Down)
  2. Manually assigned funding.

  3. Sets the maximum cost or spending limit.

  4. Cost Estimate (Bottom-Up)

  5. Automatically calculated from planned hours and purchase estimates.

  6. Reflects what the project should cost based on its task breakdown and assigned resources.

  7. Actual

  8. Shows the actual consumption of hours and real procurement costs (invoices).

  9. Updates in real time as hours are reported and invoices are created.

  10. Closed Values (if present)

  11. Displays figures from the last time the project was formally closed, useful for historical or final comparisons.

Understanding the Budget Structure

The diagram above illustrates how ITM Platform handles budget generation and tracking, from portfolio-level budgets down to individual project components.

Key elements:

  • Portfolio Budget: The sum of component budgets, enabling comparisons with actual costs.
  • Project-Level Budgets: Includes top-down budgets, estimates, and actual cost tracking.
  • Effort Estimation: Forecasts labor costs based on assigned resources.
  • Purchases Budget: Planned external costs, later updated with actual invoices.
  • Actual Costs: Includes real-time tracked values from timesheet and invoices.
  • Timesheet: Captures reported work hours through weekly or per-task entries.

Budgeting for Hours and Purchases

Hourly Cost Calculation

ITM Platform uses a standard cost system:

  • Each professional profile (internal or external) has an associated standard cost.
  • Whenever you allocate hours to a resource in a task, the system calculates the cost based on that profile’s standard rate.
  • When you estimate tasks, these costs are added up automatically in the Estimated Cost column.

Example: - A task requires 10 hours from an internal team member. If the internal rate is \$50/hour, it contributes \$500 to the estimated cost. - If you also need 5 hours from an external consultant at \$80/hour, that adds \$400.
- The estimated hours × rate from all tasks sum up to form the bottom-up or estimated cost for hours.

Setting and Reviewing the Budget

  1. Go to Projects from the MANAGEMENT menu.
  2. Select the relevant project.
  3. In the Budget section, you can:
  4. Assign hours to the internal, external, or undefined teams.
  5. Use the calculator to estimate the total budget for hours, based on the standard cost.
  6. Enter a purchases budget for materials and external procurement.
  7. Click Edit top-down budget to update overall budget figures.
  8. Observe how the Bottom-up Estimated Cost changes as you plan tasks and assign resources.
  9. Compare Budget vs. Estimated vs. Actual costs.
  10. Check Difference to Achieve Top-Down, which shows any deviation between the top-down budget and the bottom-up estimate.

As hours are reported, the Actual cost is updated. Invoices assigned to the project also contribute to actual costs in real time.

Summary

  • Top-Down Budget: Defines the maximum spending and sets financial expectations.
  • Bottom-Up Estimate: Reflects planned tasks, resource allocations, and procurement, giving a more precise cost forecast.
  • Actual Values: Shows in real-time how much budget has been consumed based on timesheets and invoices.
  • Closed Values: Captures final figures at the time of the project’s last closure.

Compare these four to spot deviations early and make informed decisions to keep projects on track.