Overview
- Contract forecast
- Calculation logic behind the forecasts
- Differentiation between real case and worst case scenarios
- Consideration of target and actual costs
- Subtraction of deductions, cost allocations, insurances and cash discounts
Alasco distinguishes between contract and project forecasts. Both types can be presented in the real case and the worst case scenarios. Both the project and contract forecasts are based on costs.
Contract forecast
The contract forecast is used to make quick statements about a single contract. The contract forecast is used to calculate the project forecast once the contract unit is "Fully Awarded" or "Finalised".
You will find the contract forecast in the cost controlling as the columns "Contract Cost Forecast (Real Case)" and "Contract Cost Forecast (Worst Case)".
You can also display the deviation from the current budget in absolute values and percentages against the real and worst case scenarios of the contract forecast with the columns "Contract Budget Deviation Real/Worst Case" and "Contract Budget Deviation Real/Worst Case (%)".
Calculation of the contract forecast
The contract forecast is calculated by adding or subtracting all relevant values of a contract. Which values are added or subtracted as part of the contract forecast can be freely configured for the real and worst case scenarios by an admin in the master data under the menu item "Forecast and cash outflow settings settings". These settings apply to the entire Alasco account.
Real case target costs example
Here you can see an example of the structure of a real case study.
Worse case target costs example
Here you can see an example of the structure of a worst case study.
Target costs settings example
These are the sample settings in the "Forecast settings" used for the above example.
Depending on the status of a contract, either the maximum of target vs actual costs or only the actual costs are used to calculate the contract forecast.
Contract in status Draft, Ordered or Partial Completed
As long as a contract has the status "Draft", "Ordered", or "Partial Completed", it depends on whether the sum of the target costs or the actual costs is higher.
The target costs include the contract volume; the actual costs correspond to the paid invoices. Detailed lists for both target and actual costs can be found below.
Contract forecast (real case) = maximum of target costs vs. actual costs (real case)
Contract forecast (worst case) = maximum of target costs vs. actual costs (worst case)
Contract in status Completed
As soon as a contract has the status "Completed", the contract forecast corresponds to the actual costs, i.e. the approved invoices.
It no longer matters whether the previously calculated contract volume was higher or lower, as the actual costs of a completed contract are always preferred.
Contract forecast (real case) = actual costs (real case)
Contract forecast (worst case) = actual costs (worst case)
Target costs
Target costs include the following data from a contract unit or contract:
- Draft contracts
- Main contracts
- Acknowledged change orders
- Open change orders
- Reserves
- Risks
- Planned receivables
- Realised receivables
In the master data, under the menu item "Forecast and cash outflow settings", an admin can define the individual items that should be added to the contract forecast. Receivables can be subtracted.
Here you can distinguish between two different scenarios for the best case (real case) and the worst case (worst case).
Note:
Please note that in Alasco all target and actual costs included in the real case forecast must also be included in the worst case forecast.
Conversely, all costs deducted in the worst case forecast must also be deducted in the real case forecast. The respective checkbox is greyed-out and can only be changed once the other checkmark has been removed from the respective forecast.
Actual costs
Actual costs include the following data of a contract:
- Approved amounts
- Paid amounts
- Contractual retentions (general and defects liability retentions)
- Other retentions
- Planned receivables
- Realised receivables
In the master data, under the menu item "Forecast and cash outflow settings", an admin can define the individual items that should be added to the contract forecast. Receivables can be subtracted.
Here you can distinguish between two different scenarios for the best case (real case) and the worst case (worst case).
If you select the option "Paid amounts", the paid amount of already paid invoices is included in the forecast calculation instead of the approved amount. This option provides you with more accurate values in your forecast, as a cash discount deduction, for example, is considered not only in the target costs bust also in the actual costs.
Note:
Please note that in Alasco all target and actual costs included in the real case forecast must also be included in the worst case forecast.
Conversely, all costs deducted in the worst case forecast must also be deducted in the real case forecast. The respective checkbox is greyed-out and can only be changed once the other checkmark has been removed from the respective forecast.
Consideration of contract terms and cash discount
In addition to the calculation logic of the forecasts mentioned above, you have the option to decide whether contract terms, such as deductions, cost allocations, insurances or cash discounts, are considered in the contract forecast.
If you activate this option in the forecast settings of the master data, the deductions for each contract are deducted from the target costs. No distinction is made between the real and worst case forecasts. The contract terms are calculated identically in both scenarios.
The actual costs are not affected, as the contract terms were already considered during invoice verification.
In principle, the contract terms, provided they are taken into account in the target costs, are subtracted as follows:
(Target contracts + main contracts + acknowledged change orders + open change orders) - contract terms
The subtraction of deductions, cost allocations and insurances is calculated the same way during the invoice verification. For the cash discount, you can define whether you want to subtract only the already realised cash discount or the total potential cash discount in the contract forecast.
Subtract realised cash discount
If you select the option "Subtract realised cash discount", which is set as default, the cash discount actually taken from all paid invoices of a contract will be subtracted from the contract forecast. The cash discount amount corresponds to the amount entered during the workflow.
Note:
In the last workflow step, "Pay invoice", you have the option to pay the "Approved amount less cash discount" or you can enter a different payment amount in the field "Other amount". This could be the case, for example, due to rounding differences.
If this deviating payment amount is within a tolerance of +- 5 cents of the approved amount minus cash discount, the cash discount is considered as a "realised cash discount". Otherwise, the invoice is evaluated as if no cash discount was applied.
Subtract potential cash discount
If you have selected the option "Subtract potential cash discount", the maximum possible cash discount amount from all contracts is subtracted from the contract forecast. Therefore, you can see the minimum amount you will have to pay if you approve and pay each invoice within the cash discount period.
As soon as an invoice is not paid within the cash discount period, the contract forecast is corrected by the corresponding unrealised cash discount.
Note:
Please note that these settings only apply to standard and multipart contracts. For recurring invoicing contracts, the forecast is calculated without considering contract terms and cash discounts.