Cost Baseline
Map time-phased budgets and generate an accurate cumulative S-curve for project performance control with this master template and worked example.
In this resource
§1 Purpose of the Cost Baseline
The Cost Baseline establishes the approved time-phased budget against which project performance is measured.
A total budget figure is insufficient for project control. To know if a project is over or under budget at any given moment, the Project Manager must know how much funding was planned to be spent by that date. The Cost Baseline allocates the estimated direct costs and contingency reserves across the project schedule, creating a cumulative "S-curve."
§2 Blank Template
A standardized structure for recording period costs, calculating the cumulative baseline, and rolling up reserve accounts.
COST BASELINE
Plot cumulative cost (S-curve) below. Then complete the monthly cost distribution table.
| Period | Period Cost (PV) | Cumulative (BAC partial) | % of Direct |
|---|---|---|---|
| [Month/Phase 1] | [$ Amount] | [$ Amount] | [%] |
| [Month/Phase 2] | [$ Amount] | [$ Amount] | [%] |
| [Month/Phase n] | [$ Amount] | [$ Amount] | [%] |
| Direct Cost Total | [Sum] | [Sum] | 100.0% |
| + Contingency Reserve | [$ Amount] | ||
| = Cost Baseline (BAC) | [$ Amount] | ||
| + Management Reserve | [$ Amount] | ||
| = Total Funding Required | [$ Amount] |
§3 Worked Example: Mary's Consulting
A completed example demonstrating the time-phased cost distribution and resulting S-curve for an 8-month implementation project.
Notice how the peak spending occurs in the middle months (July and August) during the heaviest execution phases, resulting in the characteristic steep incline of the "S" shape in the cumulative line.
COST BASELINE
Time-phased cumulative cost (S-curve) and monthly spend distribution. The cost baseline is direct cost plus contingency reserve. Management reserve sits outside the cost baseline.
| Period | Period Cost (PV) | Cumulative (BAC partial) | % of Direct |
|---|---|---|---|
| May 2026 | $5,915 | $5,915 | 4.6% |
| Jun 2026 | $6,775 | $12,690 | 9.9% |
| Jul 2026 | $27,201 | $39,891 | 31.2% |
| Aug 2026 | $26,589 | $66,480 | 52.0% |
| Sep 2026 | $22,327 | $88,807 | 69.4% |
| Oct 2026 | $20,733 | $109,540 | 85.6% |
| Nov 2026 | $10,416 | $119,956 | 93.8% |
| Dec 2026 | $7,996 | $127,952 | 100.0% |
| Direct Cost Total | $127,952 | $127,952 | 100.0% |
| + Contingency Reserve | $15,000 | ||
| = Cost Baseline (BAC) | $142,952 | ||
| + Management Reserve (sponsor-held) | $7,500 | ||
| = Total Funding Required | $150,452 |
The Shape of Spending
Projects rarely spend money linearly. Notice how 62% of the direct costs hit during the three peak build months (Jul–Sep), creating the steep vertical rise of the S-curve.
Targeting the BAC
The S-curve tracks towards the Budget at Completion (BAC), which in this case is $142,952. The PM has control over this entire amount, including the contingency.
Holding the Reserve
The Management Reserve ($7,500) is calculated but held out of the Cost Baseline. The PM must formally petition the sponsor to release these funds if unknown risks materialise.