Financial Progress

Dear Ismail,



The way to go is EVA (Earned value Analysis). You can create activity weightage from number of documents, total purchase cost and estimated manhours for engineering, procurement and construction respectively. For commissioning and documentation you can use 5% of the related construction activities (you can have more experienced guys guesses also). After all you can compare all of the LVL1 WBS levels with costs. Ex:



Enginnering: 500 USD (10 %)

Act 1A: 10 Drw (40 %)

Act 1B: 15 Drw (60 %)



Procurement: 2000 USD (40 %)

Act 2A: 1000USD (50 %)

Act 2B: 1000USD (50 %)



Construction: 2000 USD (40 %)

Act 3A: 100Mhr (20 %)

Act 3B: 400Mhr (80 %)



Commissioning&Documentation: 500 USD (10 %)

Act 4A: 25 Mhr (100 %)



Total: 5000 USD



Weightage %

1A: 10%*40% = 04%

1B: 10%*60% = 06%

2A: 40%*50% = 20%

2B: 40%*50% = 20%

3A: 40%*20% = 08%

3B: 40%*80% = 32%

4A: 10%*100%= 10%



Total: 100%





Then you can assign this resources to the activities. Now you can track your progress with this resource and EVA.



Regards,



Safak

Hi Ismail



We lack some information in order to answer you.



The projects stages per price schedules are strictly sequential, no overlap at all?



Who will establish project progress? You?



In such a case I suggest you weigh your activities

using cost percentages.

For instance, once you have finished first two activities,

project progress will be 25%

Invoicing will also be 25%.

Dear Ismail,



You can have one weightage system that you will load to your activities.



Then, you assign the cost in wbs activity. In this way, whatever percentage you will have in your progress will be reflected in the percentage of wbs activity.



So now you will have a much between your progress and payment progress. This will also cover you question regarding testing and commissioning since the wbs activtiy will catch the testing and commissioning activity if it ongoing or completed.



Thank you,

Scarlett

Dear Ismail,



This is an Excel spreadsheet. If you have a monthly invoice, then you update the progress in each Schedule at the end of each month. Then you multiply each Schedule by its weight percentage, 5%, 25%, etc.



Now we solved the progress percentage. We need to come to the time constraint. If you finish Schedule A before 3 days then you can not claim the money, but if you finish it after the 3 days limit, then you can claim the money.



Hope the information helps.



With kind regards,



Samer

Hi Ismael



It seems to me that you are talking about a standard EVA report.



Best regards



Mike Testro.

Dear Ismail,



You may maintain two weigtage systems if it is imperetive to have time based weigtage for internal monitoring. But I personally have never seen using time for weigtage factor calculation. It was mostly based on physical completion of the activity/work package.



What is linked with commissioning in the case you said. Nothing? which means your client has to pay the whole contract amount if you completed supply and construction. also the contractor gets complete amount without commmissioning. if that is the case then the project is 100% complete without commissioning (if i think from the contractor’s management’s perspective). In that case contractor will not show interest in completing the commissioning. So there will be normally some cost provisions attached with commissioning. and in case of power projects a percentage of payment will be normally attached with commissioning and the further achieving of performance parameters (like full load performance etc)

Ismail,



How did you estimate the price when bidding for these projects? It may well be that this estimate is at a sufficiently detailed level to provide a basis for your weightings.



If not, go and talk to the guys who will actually be doing the work, ask them for manpower estimates, and use this as a basis for your weightings (while you’re there, ask them for duration estimates too to help build your project plan).



Cheers,



G

You don’t need to consider time when calculating weightages –it is irrelevant.

For each payment schedule, weight your activities according to manhours, concrete used, length of pipe laid, planned expenditure, or whatever is the most appropriate measure for that schedule. Time is very rarely an appropriate measure for progress weightings.



It is to be expected that sometimes you will complete a greater %age of work in a lower %of time, and visa versa. If progress and time elapsed were directly related, all your progress S-curves would be straight lines!



Regards,



Gary

I dont think the cost weightages match exactly with the time. Because there could be high value items requiring very less time to execute. The construction of such items will require a very less duration, but those items will give a good invoice amount.



I think you can provide a weightage factor based on the cost of the items if you have to match with invoices. present that to client and use the time based weightages only for internal monitoring.