CABs
Simple Formula to Derive Earnings
Revenue (budget) - Cost = Earnings
The correct SAP transaction for a Budget Report
ZBUDGET
The Responsible Party for knowing the insurance expirations
Trick question: We are all responsible to make sure that the project does not begin before the insurances have been approved. Ultimately, the project team is responsible to be aware of the expiration dates and request extensions when necessary.
This first step when you open your project in T4.
Update Project Data (if there was change management the same day, a hard update using ZT4Update is required)
The frequency at which Forecasting and WIP are required.
EVERY MONTH
(WIP can stop when the project is +95% complete)(Forecasting when cost accepts the hand off)
CAB Stands for ___. Bonus Point if you can explain why the CABs are important.
Cost Audited Budget Report
An internal project report to verify the final forecasted revenue, cost, and earnings. Allows for early warning signs of potential issues and provides a risk/reward analysis of the projected final outcome.
The Flow of a True Owner Change in SAP
Bonus: if you can say what each acronym stands for
PCO (Potential Change Order) > COR (Change Order Request) > PCCO (Prime Contract Change Order)> SCCO (Subcontractor Change Order)
Insurance Earnings Formula
Insurance Earnings = Entitlement Rate - Cost
This is the required button to click in the Project Plan Module after making changes/updates to the GC/GR modules in T4.
Update Turner Cost
The difference between our billing to the owner and our personal cost to the project.
What is enhancement?
The frequency at which the CABs are reported to Corporate.
Every Quarter (3 months)
GMP Budget Red Flags (name at least two)
- Direct Work Savings or Overruns
- Negative Contingency
- CON / ALL / HLD lines with savings/overruns
- Cost against Fee
- Large Uncommitted costs near the end of the project
For projects under $20 million (with potential acceptable growth of $25 million), this type of insurance can be booked at a current rate of $7.3/$1000 volume
Construct assure
The SAP transaction that shows all prior forecasts for a certain project including the E/R% and $ earnings
ZPCH - Projection Change History Report
Contingency PCOs should have this for a total Revenue
$0
contingency usage is not increasing the Total Budget Value, therefore the contingency PCO should net to $0 on the left side.
Why would a current schedule be important for a Financial Budget Audit?
Multiple Answers: If the schedule increases Turner could be at risk for liquidated damages, GC/GR overruns, and Worker's Comp overruns that may not be reimbursed by the owner. Conversely, completing the project ahead of schedule may have financial bonuses attached which may be necessary to make earnings on a profit plan.
The COR line will not populate in the PCCO.
1) the COR is not set to NTP
2) The SOV is not refreshed
For projects booked above $20 million or projects that grow over $25 million (after being booked under $20 million), this type of insurance can be booked at a rate of $12.30/$1000 volume
Subguard
A negative uncommitted cost in forecasting represents this.
A back charge (cost coming off the ledger)
Project Team Requirements to Close a Project
- Final Billed
- Final Paid
- Forecasted with no adjustments (pending PCOs)
- Substatus is clean
Net Working Capital Formula
NWC = (Accounts Payable + Overbilled) - (Accounts Receivable + Underbilled)
Turner Approver has not received an email to sign SCCO but the vendor has signed it. (turner.placeholder@tcco.com)
Most common reason: the SCCOs must be saved in numerical order. The workflow is deigned so the records will not be sent to the Turner Approver until all prior SCCOs are major saved/closed.
The cost type INS05
SDI (Subcontractor Default Insurance)
What to do? You are forecasting and notice an unexpected amount of GR $.
Review the ledger (CJI3) to see if the hours were coded to the correct phase. Contact your cost analyst and accountant to correct the issue.
Explain the process of discounting unrecognized Revenue.
Especially for ALL01 and CON01, if there are $s in the budget that have a risk of being returned to the Owner, they should be discounted on the REV side of forecasting.