For this reason, whatever method you use as your BAC formula needs to be accurate, consistent and repeatable across all of the possible projects you accept and partake in.Īs we saw from the above, the budget at completion formula is a simple one, but the calculation can of course be complicated. Expert analysis and judgement - Just as it sounds, this type of budget at completion calculation involves finding an expert to produce an estimate on the cost of a project.īudget at completion is a powerful measure in project management, and is relied upon as a source of information and comparison through the life of a project.If there are tangible differences between the projects, this should of course be accounted for in order to make BAC as accurate as possible. Analogous estimating - Much like an 'analogy', this type of BAC formula involves estimating costs based on similar projects.These averages can also be adjusted based on specifics for a certain project to make it even more accurate. These unit rates or 'averages' can be pulled from industry averages, or the averages companies have recorded and analysed over time. Parametric estimating - Calculating BAC in this way involves calculating the combined unit rates of all of the activities involved with delivering a project.The 'formula' behind deriving the budget at completion is different for every company, but there are typically a few different and relied upon approaches: BAC simply equals the budgeted cost of a project. There is no real budget at completion formula. Used in this way, a project manager, company or management can weigh the budget at completion against what was budgeted initially to see if anything needs to be cut, looked into or even added. The other main way that budget at completion is used is to compare the BAC with the actual pre-determined budget which was set at the proposal, quote or tender stage (if this BAC is not calculated accurately before this stage). Add all of these costs together, and you get your project budget at completion.īAC is used in project management and as part of earned value management to compare the original forecast with continued project performance on a schedule and cost basis throughout a project. When a project manager or company forecasts and plans a project, they will break this project down into individual items or activities into costs. Budget at completion or BAC is the total anticipated and budgeted spend for a project or specific phase of works, or in simple terms, the estimated cost of the project before the project begins.

Bac finances