Goal: Monitor costs

Monitoring your project's costs is very important to your project's financial success. Monitoring costs involves reviewing the basic cost information on a repeated basis, as well as performing a more detailed analysis of cost information.

To keep your project on budget (budget: The estimated cost of a project that you establish in Project with your baseline plan.), you may want to identify cost problems by reviewing cost totals (total cost: The calculated cost of a project, task, resource, or assignment over the life of the project.) and cost variances (CV: The difference between the budgeted cost of work performed [BCWP] on a task and the actual cost of work performed [ACWP]. If the CV is positive, the cost is currently under the budgeted amount; if the CV is negative, the task is currently over budget.) that occur over time, so that you can make adjustments, if needed.

 Tip   This article is part of a series of articles within the Project Map 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.

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number 1 Review the project costs     By examining the project's current (scheduled or current cost: The latest cost of tasks, resources, assignments, and the entire project, which is displayed in the cost field as cost or total cost. It is kept up to date with cost adjustments that you make and with the project's progress.), actual (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.), baseline (baseline cost: The original project, resource, and assignment cost as shown in the baseline plan. The baseline cost is a snapshot of the cost at the time when the baseline plan was saved.), and remaining (remaining cost: The estimated cost that is yet to be incurred for a task, resource, or assignment.) cost totals, you can establish whether your project will stay within budget.

Number 2 Review the cost variances     If you set a baseline for your project, you can quickly see where the current (or scheduled) cost totals differ from the budgeted costs for tasks (task: An activity that has a beginning and an end. Project plans are made up of tasks.), resources (resources: The people, equipment, and material that are used to complete tasks in a project.), or assignments (assignment: A specific resource that is assigned to a particular task.).

Number 3 Find the costs that are over budget     Once you set a baseline for your project, you can quickly focus on the tasks or resources with cost overruns.

Number 4 Analyze cost performance     By using earned value analysis to compare your expected progress and costs with the actual progress and costs to date for tasks that have resources assigned, you can determine whether you will run out of money before the tasks are completed.

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Applies to:
Project 2007