AAOM Handbook

ES.04 Import Activity Actual Cost Data

Context

The Expenditure Schedule (EPS) is a guide to the appropriate commitment of expenditure over time. The EPS is a costed version of the Operating Master Schedule and consequently provides a roadmap of the expenditure on work activities appropriate to delivery of the business expectations. The OMS and EPS are the approved specification of the Right Work, Right Time and Right Way (which inherently defines the right cost for the work). As with any map an EPS can only be used effectively if we are able to accurately identify and track our current position against the expected position and desired end point. To achieve this we need an appropriate level of forecast detail and must provide regular, timely and accurate feedback of actual versus expected progress at this same level of detail. A usable rolling forecast will be made up of the; • actual total cost for each EPS Activity, for each reporting interval, to date, plus • projected distributions of expenditure for the remainder of the EPS time horizon. For low sample rate Activities the actual values recorded in the EPS for a reporting interval will represent the outcomes for a single event. For high sample rate Activities the actual values recorded in the EPS for a reporting interval will represent the total and the average cost for multiple events. There is very often a time lag between the occurrence of an Activity and the finalisation of actual costing data. If the EPS is only provided with feedback when actual costs are finalised this time lag can temporarily distort the understanding of the cost position and lead to inappropriate expenditure commitment decisions. To reduce the impact of this, the finalised actual costs should be reported to the EPS in the first measurement period in which they are finalised, which may mean that actual costs are reported over multiple periods. A solution to the time lag in actual costs, where it is feasible, is to feedback outstanding expenditure commitments as well as actual costs to the EPS. The committed and/or actual costs should be extracted from the appropriate systems of record and recorded in the EPS to match the minimum forecast/measurement period for costing (typically monthly).

Purpose

To track actual results against the EPS forecast.

Quantity

The following information should be imported to the EPS.

© McAlear Management Consultants 2006

Operational Planning: Set Expenditure Schedule

Updated: August 2018

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