What is Forecast to Complete (FTC) in Construction Project Management?
Forecast to Complete (FTC) is the estimated cost needed to finish a construction project based on money already spent and expected future expenses. It helps project managers track budgets, avoid overspending, and adjust financial plans to keep projects on track.
FTC is important in construction because it helps manage costs and prevents financial surprises. It works by:
- Estimating Remaining Costs: Calculates how much money is still needed to complete the project.
- Checking Budget vs. Spending: Compares actual costs with the planned budget.
- Spotting Cost Overruns Early: Identifies financial risks before they become major problems.
- Improving Financial Planning: Helps managers decide how to use resources wisely.
- Keeping Stakeholders Updated: Gives clear insights into project finances.
For example, if a construction project has a $2 million budget and has already spent $1.2 million, FTC helps decide if the remaining $800,000 is enough. If material prices go up or delays happen, FTC allows managers to adjust spending before running out of funds.
What Does "Forecast to Complete" Mean?
"Forecast to Complete" (FTC) means predicting how much money is still needed to finish a project. It combines the idea of forecasting (making an estimate based on current data) with completion (bringing a project to its end).
- Forecast: A prediction based on actual data and expected future trends. In project management, it helps estimate costs, time, or resources needed to complete tasks.
- To Complete: Refers to the remaining work or costs required to finish a project.
- Forecast to Complete (FTC): The estimated cost needed to complete a project based on actual spending and future expenses.
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.
How to Calculate Forecast to Complete (FTC)
To calculate Forecast to Complete (FTC), subtract the value of completed work from the total project budget if the project is on budget. If the project is over budget, subtract actual costs from the revised total cost estimate to get a more accurate forecast of remaining expenses.
1. Standard FTC Formula (For Projects on Budget or Slightly Off Track)
Use this when the project is progressing as planned or has minor cost variations: FTC = Budget at Completion (BAC) - Earned Value (EV)
- Budget at Completion (BAC): The total planned project budget.
- Earned Value (EV): The value of work completed based on the original budget.
- FTC Result: The remaining cost needed to finish the project without adjustments.
2. Adjusted FTC Formula (For Over Budget or Under Budget Projects)
Use this when the project is over budget or facing major cost changes: FTC = Estimate at Completion (EAC) - Actual Cost (AC)
- Estimate at Completion (EAC): The revised total cost based on current project performance.
- Actual Cost (AC): The total amount already spent on the project.
- FTC Result: The new forecasted cost to complete the remaining work.
Example Forecast to Complete Calculation
A construction project has a total budget (BAC) of 500,000. So far, the work completed is valued at 200,000 (EV).
Using the standard formula (project is on budget):
FTC = 500,000 - 200,000 = 300,000
If costs have increased and the new estimated total cost (EAC) is 550,000, with 300,000 already spent (AC), the calculation changes:
FTC = 550,000 - 300,000 = 250,000
This means 250,000 is still needed based on the updated budget.
When Should You Update Your FTC?
You should update your Forecast to Complete (FTC) regularly to keep your project budget accurate and avoid financial surprises. Construction projects often change due to supply chain delays, labor shortages, weather conditions, or unexpected scope adjustments.
You should update Forecast to Complete (FTC) at critical points in the project to reflect cost changes and ensure accurate budgeting, including:
- When major project milestones are reached: Examples include completing the foundation, installing roofing, or finishing electrical work.
- After major change orders or scope adjustments: If additional work is added or removed, FTC should reflect the updated costs.
- When actual costs significantly differ from the budget: If spending is much higher or lower than planned, recalculating FTC ensures accurate forecasts.
- After unforeseen delays or disruptions: Unexpected setbacks like bad weather or supply chain issues can increase costs, requiring an FTC update.
- During regular financial reviews: Many teams update FTC in monthly or quarterly budget reports to ensure financial stability.
By updating FTC at these critical points, project managers can adjust spending, prevent cost overruns, and keep the project on track. If you're also managing change orders, using a structured Change Order Template can help streamline the process.
FTC vs. Other Cost Forecasting Metrics
FTC is one of several cost forecasting metrics used in project management. While it estimates the remaining cost to complete a project, other metrics focus on different financial aspects. The table below compares FTC with key cost control metrics:
| Metric |
Definition |
| Estimate at Completion (EAC) |
Predicts the total expected cost of the project, including past spending and future estimates. |
| Estimate to Complete (ETC) |
Calculates how much more money is needed, based only on remaining work. |
| Variance at Completion (VAC) |
Shows the difference between the original budget and the new forecasted total cost. |
| Cost Performance Index (CPI) |
Measures how efficiently the project is using its budget. A CPI below 1 indicates cost overruns, while a CPI above 1 means the project is under budget. |
FTC differs from these metrics because it specifically focuses on the remaining cost rather than the overall budget or cost efficiency. While EAC estimates the total expected cost, ETC only looks at future costs, and VAC highlights differences between planned and actual costs.
CPI, on the other hand, evaluates spending efficiency but does not directly calculate remaining costs. Using these metrics together helps project managers make well-informed financial decisions.
How to Improve FTC Accuracy in Construction
To improve Forecast to Complete (FTC) accuracy, project managers should track spending closely, update FTC regularly, and use real-time cost data. This helps prevent budget overruns and keeps forecasts aligned with actual project conditions.
Here are effective ways to improve FTC accuracy:
- Monitor Actual Costs Regularly: Track spending in real time to detect budget issues early.
- Use Earned Value Management (EVM): Combine actual costs, planned work, and cost performance metrics for precise FTC calculations.
- Analyze Cost Trends: Identify patterns in spending and adjust FTC based on past project performance.
- Adjust for Cost Variances: If material prices, labor rates, or unexpected expenses change, update FTC to reflect new cost conditions.
- Leverage Construction Management Software: Digital tools automate calculations and improve forecasting accuracy.
Keeping FTC accurate requires continuous monitoring and adjustments based on real-world project data. Without regular updates, FTC can become outdated, leading to miscalculations and poor financial decisions.
Using forecasting tools like Mastt, tracking cost trends, and integrating FTC with other financial metrics ensures that project teams maintain control over budgets and minimize financial risks.
