Project Budgeting: Understanding Budgets, Costs & Margins in PSOhub
Learn how project budgeting works in PSOhub, including how budgets, costs, and margins are set up and used to manage profitability across your projects.
Published: 1 June 2026
Audience
- Admin
- Controller
- Project Manager
Objective
Understand how project budgeting works in PSOhub, how budgets and costs are defined on contract lines, and how PSOhub uses these values to calculate margins and manage profitability across your projects.
Introduction
Project budgeting in PSOhub is how you plan the financial side of a project before any work begins. It defines what you expect to sell, what you expect to spend, and what you expect to earn.
A well-set budget gives you a baseline to plan against, a reference point to measure delivery against, and the inputs PSOhub needs to calculate margins and monitor budget consumption as the project progresses.
This article explains how budgeting works in PSOhub, how budgets relate to costs and margins, and how the same logic applies across the different ways contract lines can be billed.
Defining Your Project's Budget
Budgets in PSOhub are defined at the contract line level. A project's contract is made up of one or more contract lines, each representing a specific scope of work, deliverable, product or expense. Every contract line carries its own budget, its own cost estimate, and its own margin.
This line-by-line approach allows you to budget at the level of detail your project requires. Smaller engagements may have only a few lines; larger projects may have many, organized into contract groups such as Hours or Expenses. Either way, the budgeting logic remains the same.
The budgets set at the line level then roll up automatically into contract group subtotals and project-level totals.
Budgeting On A Contract Line
When you open a contract line, you'll see a Financials section containing the values that make up the line's budget:
| Field | Description |
|---|---|
| Amount | The commercial value of the contract line. This is what the customer is being charged for the work covered by this line. |
| Sales Budget | The internal planned revenue value. This is the revenue figure PSOhub uses for forecasting and margin calculations. |
| Budget Costs | The planned internal cost of delivering the work on the line. |
Together, these values describe what the line is worth commercially, what it is expected to generate as revenue internally, and what it is expected to cost.
For Fixed fee, Retainer, and Product lines, the Amount and Sales Budget are always identical because the commercial value is fixed up front.
For Time & Materials and Expense lines, the two values can differ. The Sales Budget reflects the full planned revenue at the start of the project, while the Amount accumulates as time or expenses are are booked against the line.
How The Sales Budget Is Set
The Sales Budget represents the planned revenue value of the contract line. It is the figure PSOhub uses for forecasting and as the basis for the margin calculation.
For time-based work (Fixed Fee, T&M, and Retainer lines), Sales Budget is calculated by multiplying planned hours by the selling rate of each role or resource.
💡 Tip: For time-based work, the Budget tab on the project is the best place to plan your budget. It lets you build up planned hours by role or resource and feeds both the selling rates and cost rates directly into the contract line's Sales Budget and Budget Costs.
For Product lines, it is calculated from quantity multiplied by the price per unit.
For Fixed fee, Retainer, and Expense lines, it is entered directly on the contract line.
📌 Note: For T&M and Expense lines, the Sales Budget represents the planned revenue target for the line. The Amount starts at zero and increases as time is logged or expenses are recorded.
How Costs Are Budgeted
The Budget Costs value represents the estimated internal cost of delivering the work on the contract line. It is the figure PSOhub uses when calculating estimated profitability and comparing planned costs against actual delivery costs.
For time-based work, Budget Costs is calculated by multiplying planned hours by the cost rate of each role or resource.
For Product lines, it is calculated from quantity multiplied by the cost per unit.
For Fixed fee, Retainer, and Expense lines, it is entered directly on the contract line.
How Margins Are Calculated
Once Sales Budget and Budget Costs are in place, PSOhub calculates the estimated margin automatically.
The margin represents the profit for each contract line. It is the difference between Sales Budget and Budget Costs, expressed as a percentage of the Sales Budget.
The margin updates in real time as you adjust either value, making it easy to model different pricing or cost scenarios before committing to a plan.
Monitoring Budget Consumption
Once the budget is set, PSOhub helps you keep an eye on how much of it has been used. Two controls are available on every contract line:
Budget Used Alert — triggers a notification when a defined percentage of the budget has been consumed. The threshold is set using a slider, in increments from 0% to 100%.
Disable on Budget Reached — automatically deactivates the contract line once the budget is fully consumed, preventing further time or expenses from being logged.
These controls turn the budget from a static plan into an active control mechanism, allowing project managers and controllers to manage budget consumption proactively rather than discovering overruns after the fact.
From Budgeting to Profitability Reporting
The budget values set on each contract line feed directly into the Financials tab of the project, where two views give you a live picture of project profitability.
The Estimated Profitability view shows what the project should deliver financially, based on the budgets and costs you planned upfront.
The Actual Profitability view shows what the project is delivering in practice, as work is logged and expenses are recorded.
Together, they give you a clear picture of where the project stands financially at any point in time.
Why This Matters
A clear, consistent approach to project budgeting gives your organization a reliable financial baseline for every engagement. With budgets, costs, and margins set correctly from the start, you can:
- Forecast project profitability before work begins
- Distinguish between the commercial price and the internal revenue forecast
- Monitor budget consumption in real time against a clear plan
- Report accurately on margin performance across your portfolio
Budgeting done well at the start of a project is what makes accurate financial reporting possible later. It is the foundation that everything else in PSOhub's project financials builds on.
Next Steps
✅ Set a budget for your contract lines
Learn how to set the Amount, Sales Budget, and Budget Costs directly on a contract line.
How to Set a Budget for Your Contract Lines
✅ Build a detailed budget by role and resource
Use the Budget Grid to plan hours by role and resource and feed your budget directly into your project financials.
How to Create a Detailed Budget by Role and Resource
✅ Review project profitability
Compare estimated and actual profitability across your contract lines to track how the project is performing against the budget you set.
Project Profitability: How to View Estimated & Actual Profitability in PSOhub