Budget structure – Best practice

Estimated reading: 7 minutes

Introduction

Budget setup in Planyard is highly flexible, allowing you to track financials in a way that fits your company’s processes. This flexibility opens up different ways to structure your budget, making it easier to align the setup with how your team already works. This article explains how budgets can be organized and highlights key features to help you set up a structure that works best for tracking costs, commitments, and CVRs.

Track both costs and income: For each project, you will be able to track forecasted cost to complete aswell as estimated income. This will allow Planyard to calculate estimated profit and margins through out the project.

Good to know before you start

Full flexibility: Use your own cost headings, subheadings, and items. There are no predefined cost codes — you decide the structure.
Unlimited layers: Add as many headings and subheadings as your project requires.
Automatic summaries: All items under a heading are rolled up automatically. Commitments, approved costs, and income are always visible at both item and heading level.
Column details: For a full explanation of each column and how it’s calculated, see our How to understand the budget overview columns support article.
Consistency matters: While each project can have its own structure, using a consistent setup across projects makes reporting and forecasting much more powerful.

Best Practices for Structuring Cost Headings

How you set up your cost headings has a big impact on how easy it is to track performance and learn from past projects.

Follow the project timeline: Organize cost headings according to the natural flow of the project (e.g., Demolition, Structural Changes, Electrical, Walls and Partitions). This makes it easier to track financial performance package by package, each tied to its own scope of works.
Avoid overly generic items: Using broad items like Labour, Plant, Materials will only tell you that costs ran over in that category. It won’t tell you when or in which package or contract the overrun occurred. With more detailed items, you’ll know which estimates were accurate and where adjustments are needed for the next project.
Use consistent cost items across projects: Planyard saves historic cost data on items. By using the same cost items in each project, you’ll build a valuable data set over time — helping you benchmark performance and improve estimating accuracy.

Note for new users: If you’re just starting out with Planyard, there’s nothing wrong with uploading your budget exactly as you have it today. You can always refine your structure later. But in the long run, we recommend moving towards a consistent and detailed cost structure to get the most insights and value out of the system.

Tracking Income in your budget

In Planyard, you don’t just track costs; you can also track income directly in the budget. This makes it possible to keep a close eye on cash flow and profitability as the project progresses.

When income is registered, it’s always tied to budget items. How you choose to do this can vary depending on how your company structures budgets and client agreements. Below, we outline three common ways to track income in Planyard.

Option 1: Track Costs and Income on the Same Items

This option works best when your budget is structured directly in line with the client’s schedule of values (SoV) or scope of work. In this setup, your internal budget mirrors the categories agreed upon with the client, so both costs and revenues are tracked side by side.

Each budget item shows both what it costs you and what you bill the client.
All financial documents — purchase orders, subcontracts, invoices, and sales invoices — can be tied to the same budget item.
This makes it possible to track commitments, actual costs, and profit for each part of the SoV in one place.

By linking both sides of the project financials to the same structure, you get straightforward visibility into margins and a clear one-to-one match between your internal tracking and the client’s billing structure.

In the example above:

The “Profitability forecast” column highlights the difference between income and cost, giving visibility on margins.

The “Budget submitted to client” column shows the agreed value with the client (income).

The “Revised budget” column shows the estimated cost to complete for each line item.

Option 2: Hybrid – Separate Items for Costs and Income Within One Heading

work isn’t very detailed. Instead of tracking income and costs line by line, you separate them under the same heading.

For example, under a heading like Demolition:

You add a single income item representing the price agreed with the client.
Additionally, you add detailed cost items (your own cost codes) to estimate and track the cost to complete.
Commitments, subcontracts, and invoices are tied to the cost items, while the income item remains fixed.

With this setup, the profitability of each cost item isn’t very meaningful on its own, since income is only tracked once per heading. But when you collapse the heading, Planyard will summarize everything — showing you the total income, total costs, and overall profit for that package or phase.

This method keeps client-facing categories simple, while giving you detailed cost tracking internally.

In the example above, the heading “1 Demolition” has:

Several cost items (e.g., Sledgehammers, Wall demolition, Ceiling removal) where commitments, subcontracts, and invoices are tracked.
One income item (“1.07 Client Value Demolition”) representing the price agreed with the client.

In this setup, profit margins for individual cost items are not relevant, since only the income line carries revenue. What matters is the profitability shown at the category level, where Planyard always summarizes income, costs, and margin for the entire package.

Option 3: Track Costs and Income in Separate Sections

This is the most common setup, since internal cost structures often don’t match the client’s schedule of values or payment stages. In this approach, you keep costs and income in completely separate sections of the budget.

Costs are tracked with your own cost codes and headings. You tie subcontracts, purchase orders, and invoices to these items, and update estimated costs to complete as the project progresses.
Income is tracked separately, often based on the client’s schedule of values or agreed payment milestones. These items are used to track how and when revenue will be received.
Because costs and income are separated, profitability isn’t shown at item or heading level. Instead, Planyard summarizes profitability at the project level, based on your updated forecasts.

Even without item-level profitability, you still gain valuable insight from:

Forecasted Profitability – showing expected profit for the entire project.
Budget Variance – showing the difference between your original estimate and your current forecast, so you know if margins are being reduced.

In the example above, the budget is divided into two sections:

Cost Tracking (top section): Costs are tracked using internal cost codes and headings (e.g., Demolition, Structural Changes, Electrical and Plumbing). This is where subcontracts, purchase orders, and invoices are tied, and where you adjust the forecast for the estimated cost to complete.
Income Tracking (bottom section): Income is tracked separately under its own heading, in this case a Client Schedule of Values. Each line (e.g., Payment stage 1, Payment stage 2, Payment stage 3) reflects the agreed payment structure with the client.

Since costs and income are separated, profitability isn’t shown at the item or heading level. Instead, Planyard calculates:

Budget Variance, which highlights whether your current estimated cost to complete differ from your original estimate, giving early signals if you’re eating into profit margins.

Forecasted Profitability for the project overall, based on your latest forecasts.

Budget structure – Best practice

Introduction

Good to know before you start

Best Practices for Structuring Cost Headings

Tracking Income in your budget

Budget structure – Best practice

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