moosetracks

Project cost tracking

6 posts in this topic

I do machine design as in house engineer for a manufacturing company.  Typically our new projects are fairly vague at the start and the budgets are done in the same manner.  

We are staring a massive project (for the size of our group) and this time they want a budget that is accurate.  We have done a ton of work to get what I feel is an accurate budget.  Basically we have designed everything in cad and have a parts list with a cost for each item.  We added a 10% contingency and I feel like we have the costs estimated as accurately as we can for the information we have.  

Now I want to some how connect the parts list with what we actually purchase and keep a running sheet showing any overruns and items we didn't put on our list.  The budget was done in excel with a sheet for each piece of equipment.  I know when I describe it this way it sounds easy to just check off what we buy and for what it was for and line up the two columns, but its not quite that easy.  There are 50 some pieces of equipment with some of them being identical to each other.  So when we order parts for all the repeats we would have to go through each sheet and mark off that item.  I can see our spreadsheet becoming a massive jumble that could fall apart.  Other issues are things like fasteners and tooling where they are not marked as individual items, but we allocated $400 for fasteners on a piece of equipment.  

I don't know if that makes any sense or not, but my core question is how do you guys do projects like there were you need to stay on budget, and be able to explain any over or under runs?  I did a google search for various things looking for software that can help me, but I must be searching for the wrong stuff.  Is there an industry term for the type of software I'm looking for?  Also we are a small company so spending $10k on software that requires a staff to use wont work either.   

 

Any advice / insights appreciated...

 

Thanks!  

 

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We use an Excel spreadsheet.  We have several rows that explain the breakdown of the budget (mechanical, purchased equipment, electrical, outside services, etc).  Then in the columns, I put the dollar amounts budgeted and the actual spend.  I calculate a running total to show where we are in the budget.  Another helpful thing is to add a column with the PO number and an explanation of what was purchased, who purchased it and from what company.  That way, if you have overruns, you can quickly look back at the chart to see where your money went.

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drforsythe,  That was what my current plan was on the spreadsheet.  I am just worried about things getting jumbled.  If you had 6 of the same machine when you purchased parts for all 6 would you use different PO's or?  

 

 

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I have done it both ways.  I have placed orders for the components for one machine and then simply copied the requisitions in our purchasing system.  This was helpful to our accounting department, as well.  I have also placed one large order where you simply divide all of the quantities (and costs) by the number of identical machines being built.  For machines that are not identical, it is easier to track if you issue separate orders for the components for each individual machine.

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For large-scale projects with lots of stations and components, it is extremely important for purchasing and receiving to be following strict guidelines, and for suppliers to be held accountable.  If purchasing can identify the machine or station that the components are for, and suppliers can show on their receipts and for receiving to seek out those notes and enter the correct information, well then you might be accurate when it is all done.

The Excel spreadsheet is essential.  We use Microsoft Excel Sharepoint which shares a single spreadsheet through a Web browser so multiple people can access/edit.  You can easily select who has edit authority, and push updates from a single point (much better than emailing new spreadsheets or going around to every PC yourself).

If keeping project costing is that important, then you should be able to make Purchasing, Receiving and Suppliers follow the protocol.

Leverage your people to make it happen.  Make sure everyone is on the same page.  Modify the process as you go, making sure to document the process changes and communicate to everyone as you go.  This is a great task for a summer intern.  Engineering or business.

The end result will be directly related to how much effort you put in.

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Most any good accounting packages, including Quicken can do this but as indicated by kaiser_will you will need cooperation between purchasing and receiving to get everything in the correct account. If done properly even Quicken will give you all the reports needed at the touch of a button or two.

 

Edited by RussB
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