More often than not, firms that use Deltek Vision can find project budgets in the Budget and Revenue tab of the Project Info Center. There you will find a series of fields that will be further defined later in this blog. Before we go too far down the rabbit hole, let’s dive into some basics.
Deltek Vision Project Info Center
A good place to start is the Project Info Center, and whether you use the Budget and Revenue or Contract Management tab, the definitions are the same. Deltek Vision refers to budget as total compensation, but in very simple terms, it is your contractual fee or upset amount. It is statutory, referring to the agreed upon amount between seller and buyer. In no way should this be minimized as Vision uses it for many calculations and processes, but it may not necessarily be the budget. Here are some key terms you should be familiar with:
- Direct Labor is the portion of the contract value that relates to your firm’s effort and you can segregate WIP and backlog specifics to this amount using revenue categories
- Direct Expense is other direct costs such as travel that is part of your fee and not a pass through
- Compensation is the sum of Direct Labor and Expense in Vision
- Direct Consultants are third party consultants that are part of your fee and not a pass through
- Reimbursable Expenses are other direct costs such as travel that are going to be passed (possibly with a markup) to your client through invoicing
- Reimbursable Consultants are third party consultants that are going to be passed (possibly with a markup) to your client through invoicing
- Reimbursable Allowance is the sum of the Reimbursable Expense and Allowance
- Agreed Upon Contractual Value is the sum of the Compensation, Direct Consultant and Reimbursable Allowance
Furthermore, all these fields are available for reporting and revenue calculations.
Locating Budget Amounts in Deltek Vision
It is important to remember that even though these amounts are available in the Billing module, they are not systematically linked. It is true, however, that total compensation is the maximum that can be invoiced or earned. This amount is external client facing. Keep in mind, this is not the project budget.
What, what, what? The above is not a budget? In the case of a fixed fee or a lump sum project, we would expect the total compensation to reflect the budget, but the budget should be comprised of labor and expense loaded hours/amounts over a proposed schedule based on fee and scope. Simply stated, a budget is internal and should be used for comparison to actual costs charged to the project.
Maintaining Project Budgets
In closing, budgets should be re-visited and re-casted. If managed properly, firms will gain high levels of profitability. A key take away is that, for fixed fee or lump sum projects, performing under budget creates “windfalls” or the difference between the total compensation that was invoiced and earned.