Budget Types

1. Based on Project Amount: Allows users to set a fixed budget amount for the entire project. Selecting this method also allows users to set a Revenue Budget.
   
2. Based on Project Hours: Allows users to set a fixed budget hours for the entire project.
   
3. Based on Milestone Amount: Allows users to set the budget amount per milestone. The value can be entered when creating a milestone. The project budget is calculated as a sum total of all the milestones.
   
4. Based on Milestone Hours: Allows users to set the budget by hours per milestone. The value can be entered when creating a milestone. The project budget is calculated as a sum total of all the milestone hours.
   
5. Based on Task Amount: Allows users to set the budget per task. The value can be entered when creating a task. The project budget is calculated as a sum total of all the tasks.
   
6. Based on Task Hours: Allows users to set the budget by hours per task. The value can be entered when creating a task. The project budget is calculated as a sum total of all the tasks.
   
7. Based on User Amount: Allows users to set the budget amount per user. The value can be entered when adding user to project or by editing existing users added to the project.
   
8. Based on User Hours: Allows users to set the budget by hours per user. The value can be entered when adding users to the project or by editing existing users added to the project.
   

Enable Budget

• The Project Budget is enabled by default for admin profiles. 
  
• For other profiles, you can enable project budget permission by editing Profiles.
  
• EVM can be enabled only if the Project budget is enabled.

Enable Budget Threshold and Overrun Limit

Receive email notification when the actual cost exceeds the specified threshold or the planned budget.    

1. Toggle the Budget threshold email and Budget overrun email buttons in Budget Settings  section. 
   
2. Click Customize Email to modify the email template.  
   
3. Click Save.
   

Set Budget For a Project

1. Navigate to Projects  in the left navigation panel  and then click New Project.
   
2. Enter the project details.
   
3. Select the currency based on your requirement in the Budget section.
   
4. Select Based on Amount or Based on Hours in the Project Budget field to setup/create a budget for your project. You can also setup budget for milestones and tasks. If you don’t wish to setup a budget right now you can select None.
   
5. Enter the budget amount or hours based on your previous selection.
   
6. Enter the threshold limit. You can define this limit only if you have enabled Budget threshold mail in Budget Settings. Note that you will receive an email notification when the actual cost exceeds this limit. Click here to know how to enable it.
   
7. Choose the Billing Method. These are:
   
   • Based on Staff Hours - Users are assigned different rates, and project billing is based on the user rates of the members working on the project. You can set user rates when adding or editing users.
     
   • Based on Project Hours - The billing is based on a fixed project rate. The total hours logged are multiplied with this rate to get the project cost.
     
   • Fixed Cost for Project - Clients are invoiced based on a fixed cost and this option is available only for portals integrated with Zoho Invoice/Books.
     
   • Based on Task/Issue Hours - In task or issue based billing method clients are invoiced based on the Rate Per Hour set in task or issue. This billing method is used when your organization provides services which are independent of each other and hence each task/issue requires a different rate based on their purpose.
     
8. Enter the fixed cost if you select Fixed Cost for Project.
   
9. Enter the Rate Per Hour (for calculating revenue and invoicing) and Cost Per Hour (for calculating project costs)
   
10. Enter the Default Rate Per Hour and Default Cost Per Hour if you select task or issue based billing method.
    

Click here to understand how the planned and actual cost is calculated based on the above metrics.

• The default currency is the base currency chosen while enabling the budget. It is considered for budgeting only when no currency is chosen during project creation.
  
• The project list view shows the consolidated budget for tasks and issues.
  
• Planned cost for a recurring task will be multiplied by the number of occurrences.
  
• To view planned cost users must have Task > View All permission.
  
• To view actual and forecasted cost users must have Timesheet > View All permission.
  

Project budget graph is shown on the dashboard.  If you are unable to see the budget details, click and enable Budget Status. The graph gives a detailed view of the planned cost and actual cost incurred for the task. Cost variance is the difference between planned and actual cost. A budget is surplus when the planned cost is higher than the actual cost, otherwise, the budget is overrun.

Forecasting

Forecasted cost or hours gives a futuristic picture based on a project's current performance. It is the estimated cost at completion and is calculated based on percentage completion as on date, planned, and actual cost.

Forecasted cost or hours are calculated based on the work hours or planned hours & the actual hours logged for the tasks and the cost per hour. The formulae for calculating forecasted cost and forecasted hours are given below:

• Forecasted cost = (((100 - % completion) * planned cost)/100) + Actual cost
  
• Forecasted hours = (((100 - % completion) * planned hours)/100) + Actual hours.
  

Calculate Budget

• Planned hours: Total Work Hours
  
• Actual hours: Total billable Log Hours
  
• Planned cost: Planned hours * Cost per hour
  
• Actual cost: Actual hours * Cost per hour
  
• Cost variance: Planned cost - Actual cost
  

Budget Auto Calculation Schedule

Budget is calculated automatically every six hours. Within the auto-update interval if you wish to calculate the budget, click the button in Budget Status widget.

Requires Task and Timesheet > View All permission.

Track Budget Overruns

Navigate to the respective module (Task/ Milestone), click and select Overrun from Budget field. The log hours can be marked as billable in case a cost is charged to the client and as non-billable to indicate that the hours are not charged. When team members log time for the task, it will automatically calculate the actual cost of the approved billable hours. This updates the budget in real time. You might have to approve or reject timesheet records to ensure budget is calculated accurately.

Edit Budget

Once a project budget is set, it can be edited if required.

1. Click Projects in the left navigation panel.
   

2. Hover over a project and click .
   

3. Select Edit Project.
   

You can track your project costs with budgets and deliver on time without hassles by managing the planned and actual cost. This allows more accurate planning for future projects, based on the available funds and team bandwidth.

Click here to learn how to integrate with Zoho Invoice or Zoho Books.