One of the very useful features of MS Project is its ability to record and track costs within a project. This article takes a look at how costs can be recorded and then viewed in a table or report. We'll look at MS Project 2007 in this article but the same principles apply for other Project versions.

Costs are recorded in Project as part of resources and are entered via the Resources Sheet. Resource costs can either be entered on a cost per hour basis, for example a manager might cost £20/hr working on the project, or on a one off cost/use basis, for example rooms hire might cost £100 for the project duration. For a cost/use basis you can tell Project if this cost is to be incurred when the task starts, when the task ends, or incurred in proportion to task completion. You can also add overtime cost rates or additional cost rates to resources.

Resources are then assigned to project tasks, usually from the Gantt chart view using the Assign Resources toolbar button. Project can then calculate the project planned resources costs based on planned tasks duration times the resource cost rate or the fixed cost/use for the resource. To illustrate how costs are applied we'll setup a three tasks project plan, each one day duration, all linked finish to start, giving us an overall Project plan of three days duration.

Next we'll add resources to the project. To do this choose Resource Sheet view from the left hand View Bar. Then add these three resources in turn, Manager, Officer and Rooms with each resource added in a separate row. As you enter each resource you can enter the resource cost, either under Std. Rate on a per hour basis or under Cost/Use as a single one off amount. So for our Manager we can enter £20 per hour under Std. Rate, and for our Officer £10/hr. Our rooms hire will cost a fixed fee of £100 so we enter Rooms resource cost as £100 s under Cost/Use, and under Accrue At choose Start, as we have to pay the one off room hire charge at the start of occupancy.

You then assign resources to your Project tasks, normally using the Gantt Chart view and clicking the Assign Resources button. We'll assign Manager resource to Task1, the Officer to Task2 and Rooms to Task3.

To view the total costs associated with your Project you need to view the Costs table. (Choose View, Table, then Costs). The Costs table lists each task and calculates the total resource costs from the assigned resource(s) duration and cost rate or cost/use.

So Task1 costs are 8hrs x £20 for the Manager = £160, Task2 costs are 8hrs x £10 for the Officer = £80 and Task3 costs are £100 for the Rooms hire. You can also add any fixed costs to specific tasks in the Cost table. For example we plan to spend £500 on equipment in our project for use in the rooms, so we add £500 under Fixed Cost for the Rooms task, with Fixed Cost Accrual set to Start as this expenditure is planned to take place at the task start. The Total Cost column shows for each task the total costs made up of the fixed costs plus resource(s) costs. Our total project costs are now £500 Fixed Costs and £340 Resource Costs, making £840 in total. You can also add fixed costs via separate tasks such as milestones if you want to be able to track separate fixed costs.

If you then save a project baseline (Choose Tools, Tracking, Set Baseline, then click OK) you'll see in the Costs table the Baseline column shows the forecasted total costs for the baseline plan, which is the original schedule. Later in the project you may track actual progress versus plan per task. The Costs Table will then calculate for each task variance, actual and remaining costs.

The Costs table can be edited, for example by adding additional column headers. So if you save several baseline versions of your project plan you can add a cost column for each baseline in the Costs table. Or you might want to add a customised column to calculate the total resources cost (Total Cost - Fixed Cost).

The Costs table is very useful for tracking planned costs per task, but to see the total project costs we can use some of the in-built Project Reports. Choose Reports, Reports, Costs, then click Select to see the five pre-defined Project Costs reports.

If you select the Cash Flow report you'll see a costs breakdown by task and by timescale, and with totals. Try editing the Cash Flow report to show the time interval in days and re-run the report to give you costs breakdown by task and day, with totals.

Next have a look at the Budgets Report - this shows the same detail as the Costs table, listing costs for each resource but with totals, so Fixed Costs are shown as well as Total Costs. Project reports can also be edited, just like Project tables.

So Project lets you enter resource or variable costs via the Resources sheet on a per timescale or per use basis and fixed costs in the Costs Table. The Costs Table shows values of total costs per task and also for one or more baseline plans. As you track project progress versus plan, the Costs table tracks each task's costs. Project reports add further analyses features to costs analyses such as totals and sub totals.

To really get to grips with MS Project consider attending a classroom training course and explores these topics in more depth.