Project Analysis Report
The purpose of the report is to provide users with an overview of their portfolio of projects financial performance and to assist financial reviewers in consolidating month end work in progress calculations. Data is entered to generate fields for the first five columns of the report. After that, all other fields are calculations or drawn directly from the relevant Accounting System.
The data for the Project Analysis report comes from the Contracts module in UniPhi. Phased Revenue forecasts are not relevant. Sometimes there are discrepancies between the month by month phasing and the total Revenue. This can create differences between this report and other reports listed below.
The table below describes each number based field and where in UniPhi data is populated:
Field | Description |
A - Agreed Revenue | The agreed Revenue represents either the signed off contractual amount agreed with the client (including any approved variations to the original contract amount) OR if no evidence exists of an agreed Revenue, it displays the "Invoiced" value. The agreed Revenue is automatically recognised when a signed off document with contract deliverables exists in UniPhi and variations are marked as approved. |
B - Final Forecast Revenue | The final forecast Revenue is the estimate total Revenue possible for this particular project. This can be adjusted by changing deliverable values or adding possible variations. This figure drives the revenue earned to date calculation. It is essential that remaining hours and any disbursement costs are forecasted (see below). It is costs that determine % complete and % complete that determines revenue earned to date. So if you add variations to a Revenue then add the hours that will be required to implement the variation to the resource plan. |
C - Invoice To Date | This value is derived from the phased actual for the project and is imported from your accounts system. UniPhi imports values in batches and hence there can be a delay between entering an invoice and seeing its value in the report |
D - Forecast Cost at Completion | This is made up of submitted timesheet hours multiplied by the historical rates for each resource plus the remaining hours multiplied by the current rate plus any actual and forecasted disbursements. Timesheet hours are updated every time a person submits hours on the job. Remaining hours can be adjusted at any time. Forecast disbursements are updated in the costs module against the disbursement code listing (This is all detailed later in this document). Disbursements are imported from the relevant accounting system. |
E - Actual cost to date | Actual costs are timesheet hours multiplied by the historical cost rates for each resource plus actual costs displayed in the costs module (generally project disbursements). |
F – % Complete (E/D) | % Complete is measured by dividing the actual costs to date by the forecast cost at completion. |
G - Total Revenue Earned to Date (F x B) | Total revenue earned to date is calculated by multiplying the % complete by the final forecast Revenue. This represents the accounting concept of recognising only revenue you have earned not what you have invoiced. |
H - WIP (G – E) | WIP or "work in progress" is calculated by subtracting invoiced to date from revenue earned to date. Negative WIP means you have invoiced ahead of effort. This will result in an accrual adjustment to revenue down to recognise what has been earned. The reverse is true for positive WIP. WIP is thus a current asset that makes up a part of the companies working capital. The lower the WIP the better. |
I - Profit Margin to date ([C - E]/E) | The invoiced profit margin is used to compare against the earned profit margin to test for glaring forecasting errors. The margin is calculated by dividing the invoiced profit to date by the invoiced revenue to date value. |
J - Forecast Profit Margin ([B - D])/B | This metric displays the expected profit margin at completion. A significant difference between invoiced and at completion margins indicates forecast error. The most likely culprit is the remaining hours estimate. |
K - Invoiced in Period | Displays the value of invoices raised in the period (i.e. current month). The current reporting month is a filter selected in the report. It defaults to the latest closed accounting period. |
L - Actual Cost in Period | Displays the value of costs in the current month. The difference between K and L is the invoiced profit. |
M - Contract Backlog (A - E) | Contract backlog represents the value of forecast Revenue yet to be contracted. Hence it is the difference between the agreed Revenue and invoiced to date. The total contract backlog represents the volume of work that is committed but not yet invoiced. If this number is trending down then the business is invoicing more than it is winning in new work and hence is contracting as a business. This ratio is known as booked to burn ratio |
N - Awarded Backlog (C - A) | Awarded backlog is the difference between the agreed Revenue and the final forecast Revenue. It represents the amount yet to be awarded by the client. |
O - Total Backlog (M + N) | Total backlog represents work yet to be invoiced and is the sum of the two backlog figures |
Portfolio Profitability by Project
The portfolio profitability report is a core UniPhi report. The key purpose of this report is to be able to track progress and final forecast profitability to a baseline. The report consolidates all projects into the Revenue chart of accounts and internal cost charts of accounts. It adds in the time sheeted hours and estimated remaining hours to display the actual month, actual year to date and full year profit forecast compared to budget for the business.
The data for the portfolio profitability report derives from Actual revenue = invoiced revenue.
Earned revenue for the month and for the project to date and Estimate at completion revenue uses the same methodology as the Project Analysis Report
Budget revenue in the month and to date comes from the phased budget in the Revenue module. Revenue budgets are set up and phased in the Revenue module. These are different to the agreed Revenue and final forecast Revenue in the Contracts module.
Actual and estimate at completion costs for the month and project to date use the same methodology as the Project Analysis Report.
Budgeted hours are phased linearly using the lifecycle phasing dates. These phased hours are then multiplied by the current rate and any phased budgets are added to determine budget costs in the period and to date.
Budget at completion is the total budget hours multiplied by the current resource rate plus total disbursements budget in the Costs module.
Note the "Filter" dropdown limits the at completion figures to the end of the financial year and hence is based off the phased Revenue rather than the contract values.
Project Profitability
The project profitability report is a sub set to the portfolio profitability report which enables you to drill into the detail of a specific project to analyse any issues with the financial performance at the project level.
The report displays the actual revenue, cost and profit versus budget and earned values for month and project to date as well as the estimate at completion versus budget at completion.
Actual revenue for the month and project to date based off imported actual values from the relevant accounting system
Earned revenue uses the same methodology as the project analysis report but displays this by account code
Budget revenue in the month and to date is based off total budget hours for each resource phased by the dates in the project lifecycle and multiplied by the current resource rate plus phased disbursements in the costs module.
Estimate at completion revenue gets its values from two sources depending on whether the user wishes to see the whole of project life or financial year. The values are split into potential and committed.
If the whole of life filter is selected then potential revenue is all non-committed revenue contracts plus possible and pending variations on both committed and non-committed revenue contracts and committed revenue is all committed revenue contracts plus all approved variations.
If financial year is selected then the values come from phased Revenue for that year rather than from the contract values.
Budget at completion revenue is budget hours multiplied by current resource rates plus disbursement budgets.
Costs are split out into individual resource costs and disbursement codes to more closely analyse the costs of the project. Each resource will have a budgeted cost to date and in the month and this can be compared to the actual as well as the earned to determine performance. Note the weakness in the metric is the linear phasing of budget hours. However, if dates for each lifecycle phase are entered then this linear phasing could be accurate for some projects.
Schedule variance is the difference between budget values and earned values. This metric is displaying whether you are earning the Revenue at the same pace as you had planned and whether the hours worked on the job plus disbursements are occurring at the same pace as you had planned. Hence it is to do with schedule slippage and assists in determining whether the project is slipping and whether additional variations will be required to take this into account.
Cost variance is the difference between actual values and earned values. Hence, this metric is on the revenue line in this report is the same as WIP in the project analysis report.
This report can assist with whether to recognise a higher invoiced value than earned value as profit or as negative WIP. If the cost variance is negative and the contract is fixed price lump sum then it could be that the project has been completed for less effort than was expected and hence the negative cost variance should be booked to profit.
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