Financial Periods and Project Performance

From an article from Amit Parmar (PMP) a very good article combination about Financial Periods – a essential element of performance analysis with Primavera P6

Have you ever tried to plot a Budgeted vs actual curve/spread for previous three months in Primavera and wondered why is it distributing the values equally? At times we either forget to store financial periods or we don’t know how to use them. Let’s look at the following example;

We will study the following two cases to see how financial periods are an integral part of monitoring.

Case 1 - Updating an activity without storing any financial periods

Case 2 - Updating an activity and then store financial periods

Example - Activity A that has duration of 1 month with a weekly update cycle and has resource R assigned to it.

• Total Budgeted Units – 240 units
• Actual Units - Week 1 – 33 units
• Week 2 – 21 units
• Week 3 – 24 units
• Week 4 – 40 units

Case 1: We update the activity with actual units as described above without storing financial periods and then we generate an “Actual Units Spreadsheet”. As you can see, the units are spread uniformly between the weeks as opposed to being spread according to the Actual Units consumed per week.

Case 2: In this case while updating every week, we store Financial Period Values after scheduling and then we generate an “Actual Units Spreadsheet”. This time the Actual units are correctly distributed across the weeks.

The above example also holds true for Cost and Earned Value. Financial periods help store incremental values of different attributes of activities and resources.

The following data is stored when you store Financial Period data:

At the Resource Assignment Level:

• Actual Cost
• Actual Units
• At the Activity Level:
• Actual Expense Cost *
• Actual Labor Cost *
• Actual Labor Units *
• Actual Material Cost *
• Actual Nonlabor Cost *
• Actual Nonlabor Units *
• Earned Value Cost
• Earned Value Labor Units
• Planned Value Cost
• Planned Value Labor Units

* Rolled up from the Resource Assignment level

Next post would be a tutorial on how to use and save Financial Periods so do come back and don’t forget to leave your comments.

Using Financial Periods

Financial Periods are an important aspect of “Monitoring and Control” in Primavera. They help us in keeping a check on the incremental performance of our project by storing Performance Data in pre-defined periods.

Let’s go through the steps on how to setup Financial Periods for use in our project;

Assumptions:

1. Project network has been created
2. Resources and Costs have been assigned to the activities
3. Baseline has been saved
4. We have a fixed update cycle (weekly, monthly etc)

Step 1 – Creating Financial Periods

Update Cycle – Weekly

To create periods goto – Admin > Financial Periods

1. Batch create financial periods and choose dates

Batch Start Date – 07-Mar-2011

Batch End Date – 31-Dec-2012

Note - You need to choose dates that cover all your projects in database so that Financial Periods can be stored for all of them

2. Choose Financial Periods Every 1 Week. (The periods lengths can be changed as per you requirements)
3. Choose period ends on as Sunday.
4. Click on Batch Creat

Step 2 – Updating and monitoring project

Workflow: Update Activity > Update Resource Units (Actual this Period Units) > Update Costs > Store Financial Periods

Actual this Period Units: While updating your resource units, you need to update the actual units in “Actual this Period Units”. This column shows the incremental values for the update.

I prefer updating “Actual this Period Units” as I just need to put in the incremental value for Actual Units instead of calculating cumulative units for “Actual Units”

As seen in the fig. above, you just need to input the incremental units used in that week and the cumulative values are automatically incremented in Actual Units column. Actual This Period Units are reset to 0 every time you store Financial Periods after scheduling your project.

Step 3 – Next step is to Store Financial Periods

Goto Tools > Store Period Performance > Choose your “Financial Period” > “Store Now”

In order for the Financial Periods to be visible in your columns, you have to enable them by going to Edit > User Preference > Application > Columns and choose the range of periods to be visible in the columns.

 

Generating Reports – Reports can be generated by using the “Time Distributed Data” option in Reports Wizard.

Editing Financial Periods

There will be times when you need to remove the Financial Period data and depending on whether you have to remove the values for the entire project or only for selected activities, you will have to follow the steps below.

1) Editing past Financial Periods for selected activities

To edit Financial Period data for selected activities, you need to do the following:

Goto User Preferences>Applications and select the range of Financial periods that you wish to edit

You can use the Add Column tab in Activities view or Resources view to add and then edit Financial Periods

Activities View

Resources View

Once the columns have been added, the values for a period can be changed in the column against that particular activity.

Note: Earned Value – While editing Financial Periods you need to keep one thing in mind that the Earned Value and Planned Value will not change automatically if you change number of Units and Cost therefore you would have to manually calculate and edit these values.

And when you run ‘Store Period Performance’, the  and Expense data for new periods is stored as:

New Period value = Current (live) total – (Sum of previously stored values)

Therefore, editing the stored period values for Earned Value and Planned Value can affect how future period values are calculated.

2) Entire Project

Removing financial periods from a project is the easiest, follow the solution below to remove them

Make a copy of your current project and when you Paste your project in the EPS you will get the above options, uncheck “Financial Period Data” and your copied project will not have any period values stored in it.