Fundamentals of budgeting in D365 Project Operations
- sribatsapatra1
- Mar 6
- 2 min read
This article provides an overview of the key concepts you should be familiar with before using project budget management in Microsoft Dynamics 365 Project Operations.
Project Budget
A project budget represents a snapshot at a specific point in time of the estimated spend across the project phases and its associated tasks. Changes in the prices of resources, materials, or expenses do not affect the budget snapshot once it has been made part of the budget.
Cost Budget
A cost budget represents a snapshot at a specific point in time of the estimated cost for the project. All actual costs incurred on the project, including time, materials, and expenses, are compared against the cost budget to track the costs on the project.
Revenue Budget
A revenue budget represents a snapshot at a specific point in time of the estimated revenue for the project. All unbilled and billed sales on the project are compared against the revenue budget to track the revenue on the project.
Budget Line
A budget line of a project budget identifies a discrete set of dimensions that the cost or revenue of the project must be tracked on. Dimensions across budget lines must be unique to ensure that actuals that match a specific dimension are always counted against the same budget line.
Actual
An actual is a time entry, expense, or a material use that's approved by a defined workflow. This represents the cost to the project.
Budget Line Match Priority
Budget line match priority defines the order in which the budget-to-actual matching logic respects the different dimensions of an actual, while it matches against the budget lines. The logic tries to match the actual expense to a budget line with the most number of dimensions matched. The process continues until a unique budget line is matched or an error is encountered.
Budget Forecast
A budget forecast is the expected spend or revenue per budget line during the period that's defined on the budget line. The forecast equals the budgeted value when the budget is approved. If actual costs exceed the forecasted cost for a budget line, the forecast cost will be adjusted to equal the actual cost.
Variance
Variance is the difference between the budgeted spend or revenue and the actual spend or revenue. The variance value depends on whether the actual is less than or more than the forecast, and whether it's a cost or revenue budget type.
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