Question

Use of Contract Change orders to track and forecast project variations

  • 20 October 2021
  • 4 replies
  • 223 views
J
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Badge +2

We are Australian Construction business using CCOs with Projects and sales orders to track and connect to Activities and budgets once approved. Monthly reports and native content in IFS is causing issues. CCOs once spread remain in past months which is resulting in incorrect values for Cost to complete and rev recognition and billing forecast seems difficult to capture.

Would appreciate document or contact with anyone using Projects and obtaining comprehensive monthly project reports without issue. Are CCOs the best way to track Project variations??

4 replies

Vibhusitha Jananjaya
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Userlevel 5
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Hi @John Board 

CCO will always be the best way to track project variations. There are few Australian customers  itself, who are using Projects, Contracts & CCO very effectively.
Unfortunately I don't have any document to share but CCO is a very useful tool that can be used.

Kind Regards, Vibhu
J
Rank
Badge +2

Thanks Vibhusitha, 

CCO process and approvals is good to track variations and involve management oversight through approvals to allow for budget increases and revenue recognition to be forecast accurately.

But Forecasting ?, is it an IFS limitation that these are not adjusted as part of project forecast, as these are taken as “Connected values”, noting that whilst they are visible they do not account in the final summation of costs/revenue. Is there a way to ghost the amount in CCOs and have revenue transfer directly to budgets without forecasting?

Any clue on how others qualify works completed against claimed / budgeted in Month end reporting which is required to demonstrate overall project performance, work to complete plus expected revenue. We have built a complex business report but some data sources rev from CCOs seems unreliable due to spread and %. 

K
Rank
Userlevel 2
Badge +4

Hi,

have you tried creating CCO forecast and then create a new project forecasts based on the previous spread forecast (not from project) including the connected CCO forecasts?

You can add your snapshot from an updated project to compare and get the ETC/EAC with estimated and planned values.

 

J
Rank
Badge +2

Thankyou, understand your response

This is what we are doing currently. But the CCO values are locked separately and remain as full value CCOs even though when approved they are included in the adjusted forecast.

Agree CCOs valuable in tracking Project variations and provide justification for budget increases (in forecasting) but once approved and spread, these costs remain when creating new forecasts - Connected CCO values are causing issues with value of project remaining to be claimed. Ie Budget + CCO included in project new forecast, and used in project budgets, but each new forecast brings in these original values as spread values - which then indicates we have revenue/ costs not spent but they are. 

Is there no way to Ghost these figures in CCO once transferred to Forecasts?? We do not want to lose connection between Project and CCO. CRIM item??

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