Build a cost forecast from the remaining work

UNDERSTAND THE CONCEPT

A project cost forecast asks what the approved scope is now expected to cost at completion. A basic estimate at completion combines actual cost to date with an estimate of the remaining cost. The remaining estimate should reflect current quantities, productivity, rates, commitments and known risks. It is not automatically the original budget minus spending. Keeping a forecast equal to budget despite contrary evidence removes the warning managers need.

Prevent double counting when combining purchase commitments, accruals and actual invoices. A committed amount already included in actual cost should not appear again as future cost. Record assumptions and distinguish approved scope from proposed changes whose treatment follows the project's forecasting policy. Use a bridge from the previous forecast to explain quantity changes, rate changes, productivity, schedule effects and risk movements. A range or explicit scenario can communicate uncertainty more honestly than an unsupported precise number.