Project Month	Planned Project Purchase Amount & Description (see cell comment)	Planned Month that the Purchase will be deducted from the project budget (see cell comment)	Purchase Order System Activity	Accounts Payable System Payout for Vendor Invoice	PMIS Monthly Activity for Project (see cell comment)	PMIS Monthly Activity for Project	PMIS Cumulative Project Spend	PMIS Cumulative Project Spend
January, 2004	$50,000 for equipment		$50000		$50000	Purchase of equipment ($50,000) goes into the PO System, and becomes an Accrual. Since it is not paid via an invoice, it is carried over as an Accrual to Feb. Since PMIS Monthly report reflects total of Accruals and Jan. paid invoices, PMIS Monthly Activity total is $50,000 ($50,000 Accrual).	$50000	At the end of the current month, compute the following: Cumulative Invoice Payments to date ($0) + Outstanding Accruals ($50,000) = $50,000.
February, 2004	$100,000 for Professional Services (Contractors)	$50000	$100000	$50000	$150000	Purchase of Professional Services ($100,000) goes into the PO System, and becomes an Accrual. Since it is not paid via an invoice, it is carried over as an Accrual to March. Equipment purchase ($50,000) Invoice arrives and is paid in February. Accrual for this is deleted now.Since PMIS Monthly report reflects total of Accruals and Feb. paid invoices, PMIS Monthly Activity total is $150,000 ($50,000 Invoice payment + $100,000 Accrual).	$150000	At the end of the current month, compute the following:Cumulative Invoice Payments to date ($50,000) + Outstanding Accruals ($100,000) = $150,000.
Mar 2004		$100000			$100000	Purchase of Professional Services ($100,000) should have been invoiced this month (as planned), but vendor was late submitting invoice. Since it is not paid via an invoice, it is carried over as an Accrual to April.Since PMIS Monthly report reflects total of Accruals and March paid invoices, PMIS Monthly Activity total is $100,000 (Accrual only).	$150000	At the end of the current month, compute the following:Cumulative Invoice Payments to date ($50,000) + Outstanding Accruals ($100,000) = $150,000.
Apr 2004	$25000 for consumable		$25000		$125000	Purchase of Consumable Goods ($25,000) goes into the PO System, and becomes an Accrual. Since it is not paid via an invoice, it is carried over as an Accrual to May. Since PMIS Monthly report reflects total of Accruals and April paid invoices, PMIS Monthly Activity total is $125,000 ($100,000 + $25,000, and both Accruals).	$175,000	At the end of the current month, compute the following:Cumulative Invoice Payments to date ($50,000) + Outstanding Accruals ($125,000) = $175,000.
MAy 2004		$25000		$100000& $25,000	$125,000	Consumable purchase ($25,000) and Professional Service ($100,000) Invoices arrive and are paid in May. Accrualsfor these are deleted now.Since PMIS Monthly report reflects total of Accruals and May paid invoices, PMIS Monthly Activity total is $125,000 ($25,000 Invoice payment + $100,000 Invoice Payment).	$175,000	At the end of the current month, compute the following: Cumulative Invoice Payments to date ($175,000) + Outstanding Accruals ($0) = $175,000.

Purchase Monitoring Analysis Exercise:

Purchase Monitoring Analysis Exercise:

You are a PM who got the above Purchase activity report for your project at the begining of June, 2004. In this organization, purchases are coded with the project name by whoever submits the Purchase Order , so it can be charged against the project. The PM authorizes project purchases, but does not approve every single PO submitted.

Answer the following Qurestions (use as much space as you need):

1 . Why do you think its so important for a PM to make sure that project purchases are made on plan (particularly as the organization gets to the end of its annual budgeting period)?

2. It is the begining of June, 2004 and the PMIS system crashed. Fortunately, you (as the PM) keep your reports locally for your records. Your accounting representative calls you and asks for the total of the current accruals for your project. How much is this?

3. It is the begining of July, 2004 and you (as the PM) get your PMIS report. There is a June amount in "Purchase Order Activity" Column, but nothing in either of the "planned" columns. Describe one possible reason for this.