Goal: Prepare to manage costs - Project

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Goal: Prepare to manage costs

Applies to
Microsoft Office Project 2003 Microsoft Office Project Server 2003 Microsoft Project 2000 and 2002

After establishing costs (cost: The total scheduled cost for a task, resource, or assignment, or for an entire project. This is sometimes referred to as the current cost. In Project, baseline costs are usually referred to as "budget."), you can make the necessary preparations for tracking and managing them to ensure that the project stays within budget (budget: The estimated cost of a project that you establish in Project with your baseline plan.). You can specify a start date for the fiscal year, control the calculation options, and determine when the costs should be payable.

Tip This article is part of a series of articles that describe a broad set of project management activities. We call these activities "goals" because they are organized around the project management life cycle: Build a plan, track and manage a project, and close a project. The project life cycle is outlined in The Project Map, where you can find a link to an article about each project management goal. Most of the articles include links to supporting information or procedures that you perform in Project or Project Server. These "goal" articles were designed to help you not only use Project but also better understand project management.

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See all goals on the Project Map

Paper money viewed through magnifying glass

number 1 Set the month in which a fiscal year starts Before you start tracking and managing costs, you can establish the month in which the fiscal year should start for your current project.

Set the month in which a fiscal year starts

Number 2 Control the cost calculation Before you start tracking and managing the plan for costs, you should decide how you want to calculate costs, enter the default rates that you want Project to apply to newly assigned resources (resources: The people, equipment, and material that are used to complete tasks in a project.), and specify the overtime (overtime: The amount of work on an assignment that is scheduled beyond the regular working hours of an assigned resource and charged at the overtime rate. Overtime work indicates the amount of the assignment's work that is specified as overtime work.) rate for each assigned resource.

Change the calculation method for actual costs if you want to enter or import actual cost (actual cost: The cost that has actually been incurred to date for a task, resource, or assignment. For example, if the only resource assigned to a task gets paid $20 per hour and has worked for two hours, the actual cost to date for the task is $40.) values rather than have Project calculate them for you.
Change the project's standard and overtime default rates if you want Project to automatically apply the project's standard and overtime (overtime: The amount of work on an assignment that is scheduled beyond the regular working hours of an assigned resource and charged at the overtime rate. Overtime work indicates the amount of the assignment's work that is specified as overtime work.) default rates (such as minimum wage) to newly entered resources.
Calculate overtime costs if you want Project to calculate overtime costs based on the overtime rates specified for each resource. By default, Project uses the standard rate (standard rate: A base rate that you assign to resources [such as people, equipment, or material] and that Project uses to calculate resource cost totals.) of each assigned resource to calculate all work (work: For tasks, the total labor required to complete a task. For assignments, the amount of work to which a resource is assigned. For resources, the total amount of work to which a resource is assigned for all tasks. Work is different from task duration.) that is required to complete a task (task: An activity that has a beginning and an end. Project plans are made up of tasks.). Project does not calculate the cost of additional work hours by using the overtime rates that you entered until you specify those hours as overtime work.

Number 3 Define how costs accrue Specifying when actual costs are charged to your project (at the start, finish, or throughout the project) can help you establish a cash flow plan.

Define how costs accrue

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