A confirmed purchase order reduces the amount available under a budget, even before the invoice arrives. In Direction par Horizon, the Budget module brings purchase orders, supplier invoices, labour and materials together by cost code. Project managers can see what remains in the budget and find the records behind a variance.
Why invoices alone give an incomplete answer
The subcontractor has confirmed the work. The supplier has received the order. Your crew has worked this week. Some of those amounts have yet to appear in the invoices received by the office.
If you approve a new purchase using invoices alone, the remaining budget can look larger than it is. A useful review also accounts for work already ordered and the costs of your own crew. This matters when suppliers and subcontractors invoice in stages during a project.
Actual cost and available budget answer different questions
In Direction par Horizon, actual cost combines supplier invoices, labour and materials allocated to the job. It answers: which costs have been recorded against this cost code?
The available amount also accounts for confirmed purchase orders. For each cost code, the system takes the higher of total confirmed purchase orders or total supplier invoices. It subtracts that amount, along with labour and materials, from the revised budget. The purchase order and its invoice are therefore not added together as two independent expenses.
The calculation happens separately for each cost code. The project total then adds those available amounts. An invoice assigned to the wrong code can distort the picture even when the overall expense total appears correct.
An example before and after a partial invoice
This is an illustrative example, using no client data or claimed client result. A cost code has a revised budget of $50,000. Confirmed purchase orders total $38,500. Invoices received total $12,000, labour is $6,800 and materials are $1,200.
Actual cost is $20,000. The available amount is $3,500, because the calculation accounts for the $38,500 already ordered. Looking only at actual cost would suggest that $30,000 remains.
If cumulative invoices for those same orders later reach $25,000, actual cost increases. The available amount remains $3,500 as long as purchase orders, labour, materials and the revised budget remain unchanged. Once invoices exceed purchase orders, their total becomes the amount used in the calculation for that code.
Find the records behind the variance
The Budget module displays amounts by cost code. Each budget item's record brings together its purchase orders, supplier invoices, job-site hours and materials. The team can examine the relevant document or entry instead of piecing together an explanation from separate lists.
Connected modules provide the context behind those amounts:
- Purchase Orders keeps the ordered work, line items, conditions and approval follow-up together.
- Accounts Payable supports reviewing supplier invoices and their allocation before approval.
- Time Entries connects approved hours to the project and cost code.
- Inventory Movements allocates declared and approved material withdrawals and returns to the job.
The useful difference is the path from a summary amount back to its source. A project manager reviewing a variance can ask a specific question about an invoice, a purchase order or a time entry, with the record at hand.
What your team still needs to check
A positive available amount does not establish that every remaining task is covered. Some purchases may not have been ordered; some hours may still be awaiting approval. The project manager needs to review the work left to complete before approving another expense.
Available budget is also different from contract margin. It compares a cost budget against orders and expenses. Customer billings, contract conditions and remaining work answer other management questions. These figures should not be treated as interchangeable.
To evaluate this workflow for your business, bring a cost code with a confirmed purchase order, a partial invoice and recorded hours. Explore Direction par Horizon and ask to trace those records through to the budget. This gives your team a concrete way to judge whether the information supports its purchasing decisions.
