A Cost/Revenue Breakdown Structure (CBS) organizes cost and revenue elements into a hierarchy of levels and nodes. Higher levels provide a more summarized view of project costs and revenues, while lower levels provide a more detailed view. A company can define multiple CBS structures to support different financial analysis requirements. A structure can be connected to several projects within the same company, unless it is defined for use with a single project.
A CBS lets you organize and analyze project costs and revenues in a way that reflects how you want to view and follow up project financial information. Cost/revenue elements provide the basic categories used to record costs and revenues, while the CBS groups these elements into broader financial categories. For example, cost elements can be grouped into categories such as Construction Cost, Rental Cost, and Third Party Cost, which can then be grouped into higher, more summarized levels.
The Work Breakdown Structure (WBS) represents how project work is planned and delivered through sub projects and activities.
The CBS represents how project costs and revenues are organized for financial analysis and follow-up. CBS nodes do not need to correspond to sub projects or activities in the WBS.
The two structures therefore provide complementary views of the project. The WBS provides the project delivery perspective, while the CBS provides the financial analysis perspective. The same CBS can be used for projects with different WBS structures.
A CBS consists of levels and nodes that form a hierarchy for organizing project costs and revenues. Higher levels provide a more summarized view, while lower levels provide a more detailed view.
To use a CBS on a project, define its levels, nodes, and connections to cost/revenue elements, and then connect the structure to the project. For more information, refer to Define Cost/Revenue Breakdown Structure and Connect Cost/Revenue Breakdown Structure to Project.
If the connected CBS is not active when you finish creating a CBS node-level budget or forecast, a warning is displayed and you can continue or cancel.
Changes to the CBS do not update existing budget or forecast versions. Changes to the nodes or their connected cost/revenue elements are reflected when you create a new version from the project. Existing versions retain the CBS node lines and amounts with which they were created
A budget or forecast created at cost/revenue element level provides detailed financial information. For projects with many cost/revenue elements, this can result in a large number of lines to review and maintain.
When a CBS is connected to the project, you can instead create the budget or forecast at a selected CBS node level. Costs and revenues are summarized into lines for the relevant CBS nodes, allowing you to maintain and follow up project financial information using broader financial categories. This can reduce the number of lines that need to be reviewed and updated.
The appropriate level depends on the required level of financial control. A higher CBS level supports a more summarized financial review, while a lower level retains more detailed financial categories.
When you create a budget or forecast by copying values from a project, use the option Forecast at CBS Node Level in the New Project Forecast assistant to create it at CBS node level. This option is available only when a CBS is connected to the project.
Use Level ID to select the CBS level at which the budget or forecast is created. The field defaults to the lowest level defined in the connected CBS, which is normally its most detailed level. You can select a higher level for a more summarized budget or forecast.
The project level and CBS level control different dimensions of the resulting lines:
For example, selecting Activity together with CBS node-level forecasting creates lines by activity and CBS node. This retains activity information while categorizing costs and revenues through the CBS, which can help identify the activities that contribute to the CBS values. Selecting Project creates lines by CBS node without a sub project or activity breakdown.
The system uses the CBS connection of each cost or revenue element to determine the CBS node for the resulting budget or forecast line.
If an element is connected to a node below the selected CBS level, its amount is rolled up to the corresponding parent node at the selected level. If the element is connected directly to a node at the selected level, that node is used without further roll-up.
Amounts from multiple elements that resolve to the same CBS node are combined into one line. When multicurrency budgeting and forecasting is used, amounts are combined separately for each transaction currency.
If a cost or revenue element is not connected to a CBS node, it remains as an individual cost/revenue element line, ensuring that the value is still included in the budget or forecast.
Some branches of a CBS can end at a higher level than the selected level. If a branch does not contain a node at the selected level, the affected value is shown as an exception because it cannot be divided into a more detailed CBS level.
When you create a new version from an existing budget or forecast, the new version retains the structure used by the source. If the source was created at CBS node level, the new version is created at the same CBS level. You cannot select a different CBS level as part of the copy.
If cost/revenue spreading is copied, it is retained for the corresponding CBS node-level lines.
A budget or forecast created at CBS node level cannot be converted into an element-level version. To use a different level of detail, create a new version from the project using the required creation option and level.
Snapshots can be created and matched against budgets and forecasts created at CBS node level. Applicable financial values recorded against individual cost/revenue elements are rolled up and matched to the corresponding CBS node lines. This makes it possible to follow up used and committed values at the selected CBS level.
If a transaction uses a cost/revenue element that cannot be associated with a CBS node, the value remains visible with its corresponding cost/revenue element as an exception.
In the example, the CBS has three levels:
Cost elements such as Labor, Raw Material, and Assembly are connected to the Construction Cost node at Level 3. Revenue elements are connected directly to the Revenue node at Level 2 because no further revenue breakdown is required.
If the budget or forecast is created at Level 2, the amounts from the detailed Level 3 cost nodes are summarized into the Cost node. The revenue amounts are represented by the Revenue node at Level 2.
If the budget or forecast is created at Level 3, the cost amounts are represented by the more detailed Level 3 nodes. Because the revenue branch does not have a Level 3 node, its amounts cannot be divided to match the selected level and are shown as an exception.
This lets you select the CBS level that best supports how the budget or forecast should be reviewed and maintained.