Goal: Prepare to manage costs

After establishing costs, you can make the necessary preparations for tracking and managing them to ensure that the project stays within the budget. You can specify a start date for the fiscal year, control the calculation options, and determine when the costs should be payable.

Tip: This article is part of a series of articles within the Project Map that describe a broad set of project management activities. We call these activities "goals" because they are organized around the project management life cycle: Build a plan, track and manage a project, and close a project.

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Prepare to manage costs user goal graphic

number 1  Set the month in which a fiscal year starts    Before you start tracking and managing costs, you can establish the month in which the fiscal year should start for your current project.

Number 2  Review the planned costs     After you enter the costs for resources or tasks, or both, you can examine the costs to see whether they need to be adjusted to meet your goal for costs.

Click all of the following that apply:

  • Review cost totals to verify the totals that Microsoft Office Project 2007 calculated, based on cost information that you entered.

  • Review a budget for the resources in your project if you already set a budget for the project costs and want to review it for possible adjustments.

  • Analyze cost performance with Microsoft Office Project Server 2007 by using PivotTable and PivotChart views to help you understand the health of your organization.

  • Use a portfolio management tool such as Microsoft Office Project Portfolio Server 2007 to view and optimize the resource and other project costs to better align them to larger organizational goals and priorities.

Number 3  Control the cost calculation     Before you start tracking and managing the plan for costs, you should decide how you want to calculate the costs, enter the default rates that you want Project 2007 to apply to newly assigned resources, and specify the overtime rate for each assigned resource.

Click all of the following that apply:

  • Learn how Project calculates cost information. You can use a variety of types of costs, and Project 2007 calculates those costs for you as the project progresses.

  • Change the project's standard and overtime default rates if you want Project 2007 to automatically apply the project's standard and overtime default rates (such as minimum wage) to newly entered resources.

  • Calculate overtime costs if you want Project 2007 to calculate the overtime costs based on the overtime rates specified for each resource. By default, Project 2007 uses the standard rate of each assigned resource to calculate all work that is required to complete a task. Project 2007 does not calculate the cost of additional work hours by using the overtime rates that you entered until you specify those hours as overtime work.

Number 4  Define how the costs accrue     Specifying when the actual costs are charged to your project (at the start, finish, or throughout the project) can help you establish a cash flow plan.

  • Define how costs accrue

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