Budget at Completion

The Budget at Completion (BAC) is the sum of the budget for each phase of your project. This is the estimated grand total of your project. If a project manager breaks down a project into phases, and she should, then each phase can be reflected with a dollar amount that needs to be allotted to that phase. The benefit of this approach is that a company does not need to allot all of the BAC at the project s conception , but rather the initial amount required to set the project in motion, and an amount as each phase is completed.

The primary advantage of this approach is that an entity can continue to use the capital earmarked for the project until the next phase of the project is ready to proceed. A secondary advantage of the BAC is that it allows everyone involved in the project to examine the costs of each phase of the project and then its grand total. So rather than seeing Server upgrade costs: $25,128, management sees this:

Phase 1	Start Date	Costs
Server 1	November 3	$4578
Server 2	November 3	$4578
	Phase 1 total	$9156
Phase 2	Start Date	Costs
Initiate clustering servers	November 10	$6526
Install switch	November 12	$1592
	Phase 2 Total	$8118
Phase 3	Start Date	Costs
Add RAID 5 tower	November 17	$7854
Test and document	November 19	$0
	Phase 3 Total	$7854
Phase 4	Start Date	Costs
Migrate data from old servers to new (performed at night)	November 21
Put servers into production	November 22
	Phase 4 Total
	Budget at Completion	$25,128

As you can see, this approach to budgeting allows all parties to get a sense of what each phase will cost, when the monies will need to be allocated (in advance of the implementation date, of course), and the total cost of the project. This cash flow approach to project management creates a cooperation between the project manager, the project customer, and management. The project manager should include phases that do not require any outlay of cash. In some situations, you may be required to add the number of hours estimated to complete each phase of the project to factor in the cost of an employee s or a consultant s time. The preceding sample only shows the hardware expense.