What is anticipated final cost (AFC)?
Where a budget line lands if nothing changes: committed cost, plus variations weighted by their status, plus direct costs, plus the unawarded balance still to be bought. The budget is a permission — what you were authorised to spend. The AFC is a forecast — what you are actually going to spend. A project that reports only the first is reporting only what it was allowed to do.
Budget, actual, and the number in between
Actual cost tells you what has been invoiced. It is the furthest behind of any figure on a cost report, because an invoice trails the commitment that caused it by weeks and the decision that caused the commitment by longer.
Budget tells you what you were permitted to spend. It is not a forecast and it never was — it is the number the project is being measured against, which is a different job.
The anticipated final cost is the only figure on the report that points forwards. It is what a board is actually asking for when it asks how the project is going.
What goes into it
Four components, and the second is where the judgement lives:
- Committed cost — awarded contracts and purchase orders, from the award.
- Variations, by status — approved ones are money and enter as commitment; pending and anticipated ones are exposure and enter as forecast; disputed ones are held, quantified and visible rather than netted off.
- Direct costs — the spend with no purchase order behind it.
- The unawarded balance — scope still to be bought, at the current estimate.
Cadence is not the point; latency is
The working convention is a monthly AFC review, and it is a convention rather than a benchmark. But reviewing monthly does not make the number current — an AFC recomputed monthly from inputs that only arrive monthly is still reporting last month.
What makes it current is holding the ledger in the same system as the instructions, the awards and the invoices, so that a decision with a cost consequence enters the forecast on the day it is taken. Then the monthly review is a review, rather than a reconstruction.
References
- module: /modules/cost-control/ — the budget-line ledger model; the monthly review cadence is a cost-management convention, not a measured benchmark
Zepth is the construction project delivery platform — it runs construction, procurement and asset management on one record, and does the work: reading the drawings, reviewing the submittals, matching the invoices and flagging the risks, with a human sign-off on anything consequential.
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