Variance at Completion

Definition: Variance at Completion (VAC) is a key performance indicator in project management used to determine the difference between the final planned budget and the expected costs at the completion of a project.

It is calculated by subtracting the Budget at Completion (BAC) from the Estimate at Completion (EAC). VAC is an important metric to assess whether the project is expected to be completed within the originally allocated budget or if it will exceed it.

Interpretation and Significance:

A positive VAC suggests efficient use of resources and that the project is being completed within or under budget.
A negative VAC highlights potential issues, such as unanticipated costs, which may lead to financial adjustments or scope changes.
VAC is used by stakeholders to track budget performance and adjust financial planning, ensuring that the project remains financially viable.

Impact on Project Management:

Early Detection of Budget Issues: VAC helps in identifying potential budget overruns early, allowing project managers to take corrective actions and prevent further financial strain.
Informed Decision-Making: By understanding the VAC, project managers and stakeholders can make more informed decisions regarding resource allocation, timeline adjustments, or additional funding requirements.
Improved Financial Control: Regular tracking of VAC enables better financial control, helping to keep the project within budgetary limits and reducing the risk of cost overruns.

Variance at Completion

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