# Project Costing for Special Machine Builders: Quoted vs Actual, Before Shipment > Source: https://netray.co/resources/project-costing-for-special-machine-builders > Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems. > Section: Knowledge Base ## Short answer How special machine builders track committed and actual cost by discipline, forecast estimate to complete, and find where margin slipped on each project. ## Category erp-general ## Content **Intro:** Project costing for special machine builders means tracking committed and actual cost against the quoted budget by discipline, engineering, controls, fabrication, purchased parts, and installation, and forecasting the estimate to complete while the project is still running. Learning at shipment that margin evaporated is too late. The goal is a monthly view that tells the project manager what the final cost will likely be, early enough to act. **Sections:** #### Set the Budget in the Same Buckets as the Quote **Body:** Costing only works if the budget lines match the quote lines. Break the project into mechanical engineering, electrical engineering, controls programming, project management, fabrication, assembly and wiring, purchased components, outside services, test and FAT, and installation and commissioning. Load the quote hours and dollars into each bucket as the baseline. If the quote was one lump, split it afterward with the estimator before the project starts, because reconstructing a budget after problems appear never works. In Infor SyteLine, Epicor Kinetic, or NetSuite these map to project tasks or cost codes. **Bullets:** - One budget line per quote line - Hours and dollars both, so rate variance is visible - Separate baseline from approved change order budget - Include warranty reserve and commissioning travel #### Committed Cost Is More Useful Than Actual **Body:** Actual cost lags. By the time a purchased part is invoiced the decision was made weeks ago. Committed cost, open purchase orders plus received and invoiced, shows where the project is heading. A PO for a robot that came in 15 percent over budget is visible the day it is placed. Make sure your ERP or reporting shows commitments by project line. If it only shows receipts, add a simple weekly extract of open POs to the project cost view. #### Labor Capture, Especially Engineering **Body:** Shop labor is normally booked by job. Engineering often is not, which leaves the largest and least predictable cost invisible. Require weekly time entry by project and discipline. It does not need to be heavy: a timesheet with project, task, and hours is enough. Without it, you cannot compute actual-to-estimate ratios, and you cannot tell whether controls programming or mechanical design is the one that runs over. Treat unbooked time as a data quality problem that you track and report by person. #### Estimate to Complete and Margin Forecast **Body:** Each month, the project manager should enter an estimate to complete per line based on remaining work, not simply budget minus actual. Actual plus estimate to complete gives a forecast at completion, and subtracting that from contract value gives forecast margin. A drop of more than a few points is the trigger for a review: is it a change order, a rework issue, or a missed assumption? This forecast also feeds percent-complete revenue recognition when you recognize revenue over time, which your accountant will want to be accurate. #### Post-Project Review and When Simple Is Enough **Body:** When a project closes, compare final cost to the quote by line and record the reasons for variance in a short note. Over a dozen projects, the pattern, for example that controls always runs 40 percent over, becomes a correction factor in the next estimate. If you ship only a few machines a year, a spreadsheet pulling ERP actuals each month does the job. Invest in an ERP or AI reporting layer when project count makes manual reconciliation the bottleneck. **Cta:** Netray can answer questions like which projects are forecasting below target margin, straight from your ERP, with the underlying query shown. **Faq:** #### How do machine builders track project profitability? **Answer:** They set a project budget matching quote lines, track committed and actual cost by line, forecast estimate to complete monthly, and compare forecast margin to the contract. Engineering time capture is the common gap and should be fixed first. #### What is WIP for an ETO machine builder? **Answer:** Work in progress is the cost incurred on unfinished projects, plus profit recognized if you use percent-complete accounting. It depends on accurate cost to date and estimate to complete, so project costing quality directly affects your financial statements and bank covenants. #### How often should project cost reports be reviewed? **Answer:** Review at least monthly, plus at key milestones such as design freeze, completion of build, and FAT. Projects with large commitments or schedule risk deserve a weekly look until the exposure is understood. ## Related Slugs - syteline-project-profitability-reporting - syteline-project-accounting-setup - manufacturing-costing-methods-comparison - gross-margin-analysis-manufacturing - infor-ln-project-based-manufacturing ## Search terms project costing machine builders, special machine builder job costing, ETO project profitability, estimate to complete custom machinery, committed cost project manufacturing, WIP reporting engineer to order --- Talk to an engineer: https://netray.co/contact?intent=erp_ai | Machine catalog: https://netray.co/agent/catalog.json