The budget is the approved cost structure for a project.

It differs from project cost planning in that it is binding. While you must estimate costs as accurately as possible during the planning phase, it is in the approval phase that you prescribe your project funds, in the form of a budget. The budget is the device by which the management approves the expected development of project costs over a given timeframe.

The Project System recognizes the following different budget types:

• Original budget
  The original budget is the budget originally allocated - that is, the budget before any updates were carried out. From a point in time which you stipulate, it can only be amended by means of budget updates.

• Budget updates
  Unforeseen events, additional requirements, prices rises, and so on, may mean that you need to correct the original budget - that is, budget updates are necessary. These take the form of:

• Supplements
• Returns
• Transfers

• Current budget
  The current budget is calculated as follows:

• Releases
  In many businesses, budget distribution is not the same as releasing the funds. For this reason, the Project System includes a separate funds release facility, which you can use to make successive budget releases. The release is based on the current budget - that is, the original budget as amended by budget updates.

This section describes: