How to Create Detailed Financial Plans › About Cost Plans

About Cost Plans

Cost plans are an alternative to financial summaries if you want to create a detailed plan that spans more than one fiscal time period. You can track planned costs, actual costs, and variances over the lifetime of an investment. In addition, you can break down data by different grouping attributes or criteria. You can define a cost plan from scratch or populate it automatically and submit it as an investment budget for approval.

Use CA Clarity PPM cost planning to facilitate your organizational financial planning process and to enforce standards.

A cost plan consists of the following:

• Plan of record
• Grouping attributes
• Line item details

You can configure a cost plan to display the following revenue fields. These fields are not available by default. Posted transactions must exist for these fields to display values.

Actual Unit

Displays the aggregated actual unit for a given fiscal period.

Actual Cost

Displays the aggregated actual cost for a given fiscal period calculated as Actual Units * Cost.

Actual Revenue

Displays the actual billing rate for a given fiscal period calculated as Actual Units * Rate.

Cost Variance

Displays the delta between Cost and Actual Cost.

Revenue Variance

Displays the delta between Revenue and Actual Revenue.

Units Variance

Displays the delta between Units and Actual Units.

Example: Manage a Cost Plan

Cost planning starts at the investment level and goes through multiple iterations of cost projections and reviews to produce the final approved budget. Investment budgets roll up to the department level and then roll up to higher levels as desired. To streamline this planning process, financial controllers can standardize the ways to capture and break down costs for the entire organization. These standards ensure that all the costs are easily recognized and roll up to the desired levels. Financial controllers can implement standardized budget approval processes to review and approve individual and departmental budgets.

The following is one example on how to manage cost plans based on standards defined by the financial controller. When a finance manager approves a cost plan, it becomes the budget plan for an investment.

1. Financial controller sets global default standards at the entity level to suggest the recommended cost planning structure.
2. Project manager does the following:
   • Creates cost plans for an investment as estimates for a budget.
   • Designates a specific cost plan as the POR.
   • Optionally, associates the POR with a benefit plan.
   • Submits the POR for budget approval.
   • Optionally, associates a benefit plan with the submitted budget.
3. Finance manager or other designated authority approves or rejects the submitted cost plan as the budget plan.