What is Forecast to Complete (FTC) in Construction Project Management?
In the world of construction project management, Forecast to Complete (FTC) is a term that packs a lot of punch. It’s an essential metric used to predict how much more money will be needed to complete a project based on the current progress. Whether you're new to project management or a seasoned pro, understanding FTC is vital to ensuring you don’t end up with unpleasant budget surprises.
Let’s dive into what this term really means and how you can use it effectively to keep your construction projects on track.
What Does "Forecast to Complete" Mean?
At its core, forecast to complete refers to the estimated cost required to finish the remaining work on a project. It helps project owners and managers answer that nagging question: How much more is this going to cost me? It’s part of a broader practice known as Project Cost Management, which focuses on keeping project expenses under control from start to finish. You can read more about tracking project costs effectively in this guide.
By calculating FTC, construction project managers gain visibility into future spending. This insight is invaluable, especially when managing large-scale projects with hundreds of moving parts.
Why is Forecast to Complete Important?
- Prevents Budget Overruns: FTC gives you a realistic picture of what it will take financially to cross the finish line. Without it, you’re flying blind and risk running into costly surprises.
- Improves Decision-Making: With a solid forecast, you can make informed decisions about resource allocation, subcontractor payments, and material purchases, helping the project stick to the plan.
- Builds Stakeholder Confidence: When you can provide accurate forecasts, stakeholders—whether they’re clients, investors, or internal teams—feel more confident in the project’s financial health. No one likes vague answers when it comes to money!
How to Calculate Forecast to Complete (FTC)
There’s no one-size-fits-all approach to calculating FTC, but it often involves two main formulas:
- FTC = Budget at Completion (BAC) - Earned Value (EV)
This simple formula works when your project is on track or experiencing minor delays. It tells you how much budget remains to complete the project. Learn more about Budget at Completion. - FTC = Estimate at Completion (EAC) - Actual Cost (AC)
Use this when the project has deviated significantly from the original plan. EAC is the revised estimate of total project costs, and this formula helps you figure out what’s left to spend. For more about EAC, visit the Estimate at Completion page.
Real-World Example of Forecast to Complete
Let’s say you’re managing a construction project with a total budget of $1,000,000 (BAC). You've completed 60% of the work (EV = $600,000), but your actual costs so far are $650,000. Clearly, something’s gone off course. Using the second formula, FTC helps you realize you’ll need an additional $350,000 to finish the project. Without this calculation, you might assume you’re right on budget—until it’s too late to course-correct. For more tips on how to track committed costs, check out this guide.
When Should You Update Your FTC?
Ideally, you’ll be updating your forecast to complete on a regular basis. Construction projects are notorious for changing course due to unforeseen circumstances, whether it’s supply chain issues, labor shortages, or weather delays. By frequently reassessing FTC, you stay ahead of any potential budget nightmares. If you're also managing change orders, you might want to look at our Change Order Template to streamline this process.
Here are some key moments to update your forecast:
- When significant milestones are reached (e.g., foundation completed, roofing installed).
- After major change orders or scope adjustments.
- Anytime there are substantial variances between actual costs and the project plan.
External Resources to Improve Your FTC Calculations
By understanding and using Forecast to Complete (FTC) effectively, you’ll have one of the most powerful tools in your project management toolkit to steer your projects toward financial success.
So, the next time you’re standing on-site, watching your project take shape, you can breathe a little easier knowing you’ve got a handle on both the work and the money needed to get it done.
