Financial Management Terms & Glossary

BAC

BAC means Budget at Completion in project management, representing the total planned cost of a project, including labor, materials, equipment, and overheads.

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Financial Management

Bond Oversight Committee

A Bond Oversight Committee is a group of volunteers typically appointed to oversee the implementation of bond-funded projects.

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Financial Management

Budget at Completion

Budget at Completion (BAC) is a project management term that refers to the total budgeted cost of a project.

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Financial Management

Construction Cost

Construction cost is the total amount required to deliver the physical construction works on a project. It includes direct costs, site overheads, approved changes, and allocated risk allowances from early delivery through final account.

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Financial Management

Construction Estimate

A Construction Estimate is a detailed approximation of the costs associated with a construction project.

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Financial Management

Cost Escalation

Cost escalation refers to the increase in the cost of materials, labor, or other project expenses over time, typically due to market conditions, inflation, supply chain disruptions, or other external factors.

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Financial Management

Estimate to Complete (ETC)

Estimate to Complete (ETC) is a forecast of how much more money is needed to complete the remaining work on a project.

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Financial Management

Forecast to Complete (FTC)

Forecast to Complete (FTC) is the estimated cost needed to finish a project based on money already spent.

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Financial Management

Management Reserve

Management Reserve is a fund set aside by senior management to cover unforeseen risks that might occur during the project but were not initially identified in the project planning phase.

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Financial Management

Milestone Payment

Milestone Payment refers to a payment structure where payments are made to contractors upon the completion of predefined milestones in the contract.

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Financial Management

Payment Claim

Payment Claim in Construction is an Australian and European term used in the construction industry, as a formal instrument requesting payment.

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Financial Management

Payment Schedule

A Payment Schedule or sometimes called Payment Certificate, is a formal document issued by the superintendent to a contractor in a construction project.

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Financial Management

Progress Certificate

A Progress Certificate is a formal document issued by the superintendent or an authorized representative in a construction project, certifying the amount of payment to be made to the contractor for work completed during a specified period.

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Financial Management

Progress Payment

Progress Payment is a term for when the contractor is paid at intervals as work progresses rather than receiving a single payment upon completion of a milestone.

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Financial Management

WBS (work breakdown structure)

A hierarchical decomposition of a Capital Project budget. Components of a WBS for include phases like design, procurement, construction, and commissioning,

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