Project Management Accounting: Budgeting, Tracking, and Reporting Costs and Profitability, Second Edition

Project Planning

Work Breakdown Structure and Project Schedule

The Work Breakdown Structure (WBS) contains a description of each deliverable that makes up the final project deliverable along with the tasks that must be performed in order to create each deliverable. Each task also has a description that defines the inputs, outputs, materials, and resources required to complete the task. The task description also defines how long each resource must work to complete the task as well as how much of each material is required.

The project schedule arranges each task in its proper order of execution and indicates the order in which the tasks must be done. The project schedule also defines task dependencies, that is, which tasks must be completed before other tasks may begin. Based on these calculations, project managers know when tasks must be carried out and what the end date for the project is, as well as what its critical path will be.

Understanding how much work must be performed is crucial to creating the project budget. During execution, one of the elements of project control is collecting information about how each task is executed. If managers do not have an accurate measurement of the expenditure of resources and materials, then they cannot determine the actual cost of a project or understand how the project is performing financially.

From the task description, project managers know the amount of effort that is required to complete the task. They also know when the task is supposed ...