It is possible to "preview" future personnel costs, by developing scenarios using the current or actual costs, as a basis for calculating future costs.

Previewing future costs and projecting future costs are not the same thing. When you preview costs, you are in effect assuming that the factors that contribute to costs - the number of employees, the pay structures - stay the same. When you develop a projection, your calculations can include organizational changes, as well as other amounts that are not typically identified in personnel/payroll data, for example, training requirements for specific employee groups.

Typically you develop cost previews using either basic pay or payroll results as a source of data. If you use payroll results, you have the option of using historical payroll, or simulating a payroll run in the future.

Some customers consider cost previews to be a statement of target costs. If you retain scenarios from one planning period to another, you could compare the target with the actual results (when they occur), to determine how accurate your previews were. In fact, for controlling purposes it is recommended that you do actual/target comparisons in the middle of the planning period.