Cost planning deals with the costs you expect to incur in connection with your project as it is executed.

Cost planning has different aims at different stages of the project:

• At the approval stage, it forms the basis for the budget allocation.

• During project execution, you use cost planning to monitor and control cost variances.

Cost planning in the Project System is effected by means of the WBS and networks.

In the network, the emphasis is on planning not costs, but dates, human resources, and operating resources. The costs are calculated automatically on the basis of an existing price/quantity structure. You always use cost planning by means of networks if you are using complex project processing - that is, if dates and resources, as well as costs, are relevant to you.

If planning and monitoring of costs is most important, as in, say, capital investment projects or overhead cost projects, you should plan your costs using manual cost planning in the WBS. Integration with Controlling and Financial Accounting is effected by means of the WBS.

• Planned costs from assigned orders recorded in the project.

• Cost forecast for calculated plan costs, based on variances during project execution.