🔥 Estimated Actuals in EVMS - Bridge the Gap Between Cost Incurred and Cost Recorded 🚀

In an Earned Value Management System (EVMS), timely and accurate cost data is essential to assessing true project performance. However, because accounting systems often lag behind real-time execution—particularly on large federal contracts—project teams must rely on estimated actuals to reflect incurred but unposted costs at the end of a reporting period.

🔍 What Are Estimated Actuals?

Estimated actuals are projected costs for work already performed but not yet recorded in the official accounting system. They are used as a temporary stand-in to ensure the Actual Cost of Work Performed (ACWP) or Actual Cost (AC)—aligns with what has truly been expended during the current period.

These estimates are especially critical during month-end EVMS reporting cycles, when performance data is due before the books have closed. When properly documented and reconciled, estimated actuals are fully acceptable under the EIA-748 guidelines governing compliant EVMS implementations.

🛠️ When Are They Applied?

Estimated actuals are commonly used in the following scenarios:

🧾 Subcontracted Work: Deliverables completed but invoice not received

📦 Material Receipts: Items received, invoice pending

👷 Labor Charges: Hours worked but not yet posted

✈️ Travel/ODCs: Costs incurred but unbilled

They are typically entered at the control account or work package level in the EVMS cost engine (e.g., Deltek Cobra) and tied to the same element of cost as the eventual true actual.

🔄 How Are They Reconciled?

Once the accounting system posts the official cost data, estimated actuals must be removed and replaced with the recorded values. This is done through an adjustment in the cost system to prevent duplication or misrepresentation. Reconciliation is critical to maintaining the fidelity of historical cost data and ensuring audit readiness.

In practice, project control teams must coordinate closely with accounting and procurement to validate estimates, document assumptions, and track reversals month to month.

🎯 Why They Matter

Without estimated actuals, performance metrics like Cost Variance (CV) and Cost Performance Index (CPI) would be artificially inflated or deflated—leading to inaccurate analysis and misinformed decision-making. For EVMS to reflect true project health, ACWP/AC must be as real-time as possible, even if that means leveraging intelligent, well-documented estimates.

📣 At Elixir Value Management Systems, Inc., we help government contractors run compliant, integrated EVMS—accurate down to the last hour and dollar. From implementation to training, we ensure your system reflects the truth—not lagging data.

📞 Let’s Talk!

📧 karlo.menoscal@elixirvms.com

📱 949-351-8896

🌐 www.elixirvms.com

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