Guide To Estimate at Completion in Project Management 

Estimate at Completion (EAC) in project management is a cost forecasting tool that helps predict the total cost of a project when it’s finished. This estimation dynamically updates throughout the lifecycle, allowing you to compare actual performance against your initial budget amount at completion.

As part of Earned Value Management, the method incorporates key metrics like Cost Performance Index (CPI) and Schedule Performance Index to provide accurate forecasts.

The idea behind this calculus is to combine actual costs to date with remaining cost estimations so that planners can develop comprehensive budget projections.  

We’ll get back to calculating later.  

EAC is important because it tracks performance metrics and monitors cost variations throughout the project lifecycle. It provides real-time insights into budget variances and potential budget overruns that require immediate attention.

As a project manager, you should use the estimated data to make smarter decisions about how you manage and allocate resources, make schedule adjustments, or take corrective actions. These measures ensure your entire project stays on track and meets its financial objectives.

Remember that regularly monitoring and updating performance data results in more precise calculations and better outcomes.  

Regular tracking of the estimations alongside other key performance indicators provides total oversight and cost control.  

This dynamic forecasting technique, integrated with Earned Value Management, enables you to monitor cost trajectories (including additional costs) and make timely adjustments based on actual performance data.

When you enhance the estimate at completion with additional project management tools, you’ll maintain better control over your project’s financial health and guarantee accurate budget realignment.

You’ll benefit from early detection of cost deviations and enhanced risk mitigation capabilities, allowing you to make timely adjustments to your execution strategy. The method’s dynamic nature means you’re not locked into initial estimates.

Since you’re regularly updating your cost calculations using performance indices like CPI and Schedule Performance Index, you’ll get a clearer picture of the final costs. 
 
This proactive approach to cost management helps you allocate resources with better efficiency and maintain better cost control processes over your project’s entire budget throughout its lifecycle.  

This estimation provides essential insights for evaluating project performance and making strategic adjustments when necessary.

It analyzes variances between actual and planned costs, helping you identify potential issues before they escalate into major (and expensive) problems.

These capabilities empower you to maintain better control over your project’s trajectory and outcomes.  

If you’re wondering how to calculate an Estimate at Completion effectively, you’ll first need to understand the basic formula:

EAC = Actual Cost (AC) + Estimate to Complete (ETC), which is a base for all calculations.  

Different project scenarios call for different estimation formulas, such as using the CPI-based formula when performance trends are likely to continue or the EV-based formula when the remaining work follows the original budget.  

Selecting the most appropriate formula depends on your project’s current performance indicators and whether you expect previous performance trends to continue or change in the future.  

The basic formula varies based on your project’s specific circumstances and performance patterns.

Understanding these formulas helps you to select the most appropriate calculation method based on your project’s current conditions and performance metrics, leading to a higher accuracy of cost forecasting.  

Selecting appropriate EAC formulas requires careful consideration of your project’s current performance metrics and operational conditions.

Remember to adjust your formula selection as project conditions evolve.

EAC provides a clearer dynamic view of your project’s final cost compared to the static BAC, while ETC focuses specifically on the remaining work to be completed.  

The relationship between these metrics becomes particularly significant when examining TCPI, which helps you determine the cost efficiency needed to meet your project’s financial goals.

While BAC remains static as your initial budget baseline, EAC evolves throughout the project, incorporating actual costs and performance metrics to forecast the final price.

The difference between EAC and Estimate to Complete (ETC) is in their focus and application. While EAC thoroughly forecasts your project’s total cost at completion, ETC specifically addresses the remaining costs needed to finish the work.

You’ll use the Estimate at Completion to create the overall budget plan and performance assessment, whereas ETC helps you allocate resources and plan for upcoming project phases. Understanding these differences guarantees you’re using the right metric for your specific management needs.

The relationship between Estimate at Completion and To Complete Performance Index (TCPI) forms an essential framework for evaluating project performance and future requirements.  

When you’re analyzing project health, you’ll use the EAC for cost forecasts, while TCPI will indicate the efficiency needed to meet those targets.

Together, they help you to assess whether your project’s remaining work can be completed within the forecasted budget.  

The basic calculation begins with the formula EAC = BAC / CPI, though you’ll need to think about complex variations if your project demands attention to both cost and schedule performance.  

While mastering these calculations might seem scary at first, you can avoid common pitfalls by double-checking your input values and ensuring you’re using the appropriate formula variation for your project’s specific circumstances.  

Here, you’ll need to analyze your project’s actual costs, earned value (EV), and budget at completion (BAC) to create an accurate forecast.

For complex projects, you might want to use the bottom-up ETC method, which involves creating detailed estimates for the remaining work and adding them to your actual costs.

Let’s be realistic and imagine three example projects that are going off-track. The goal here is not just to memorize formulas but to see how these calculations work in action.

Imagine you’re managing a project with a Budget at Completion (BAC) of $100,000. So far, you’ve spent $60,000 (this is your Actual Cost or AC) and earned only $48,000 worth of work (Earned Value, or EV) in return.

That means you’re running behind in terms of cost performance.

To figure out how much the total project is now likely to cost, you’ll need to calculate your Cost Performance Index (CPI) first:

CPI = EV / AC = $48,000 / $60,000 = 0.8

This tells you that for every dollar you spend, you’re only getting 80 cents of value.

Now use this CPI to calculate your Estimate at Completion using this formula:

EAC = BAC / CPI = $100,000 / 0.8 = $125,000

That means if your current spending trend continues, the project will end up costing $25,000 above the original budget. This gives you an early warning to act.

Let’s say your project is now facing both budget and timeline pressure, not just cost inefficiency. That’s when you need to use the detailed formula that considers both CPI and Schedule Performance Index:

EAC = AC + [(BAC – EV) / (CPI × SPI)]

Let’s use real numbers again:

Now plug the values in:

EAC = $120,000 + [($200,000 – $100,000) / (0.83 × 0.9)]

EAC = $120,000 + ($100,000 / 0.747)

EAC ≈ $120,000 + $133,857 = $253,857

This tells you that if current performance continues, your project might cost over $250,000, not $200,000. That’s a clear red flag for budget overruns — but also a chance to revise the plan before it gets worse.

Sometimes, past performance isn’t a good indicator of future costs — maybe you’ve changed vendors or revised the scope. In this case, you’d drop the CPI and use the simplest version of the formula:

EAC = AC + Bottom-up ETC

Let’s say you’ve spent $70,000 so far, and based on your current scope and remaining work, you estimate you’ll need another $40,000 to finish.

EAC = $70,000 + $40,000 = $110,000

This approach gives you a fresh view, which is useful when your project has taken a major turn, or you want to readjust the performance measurement baseline of your cost forecast.

When you’re calculating the estimated costs, it’s essential to avoid the following errors by maintaining accurate data and regularly updating your calculations.

You’ll need to include multiple methods and maintain detailed records while consistently monitoring both CPI and Schedule Performance Index to guarantee your estimation remains reliable and relevant throughout the project’s duration.  

When you’re tracking project performance, EAC is pretty much your financial compass, helping you estimate whether your project will land within or exceed its budget estimations.

EAC integrates seamlessly with Earned Value Management principles, providing real-time insights into your project’s financial health. 

An evolving estimation model is invaluable when new expenses arise, as it allows you to adapt your cost projections and make necessary adjustments to keep your project on track.  

To maximize the formula’s effectiveness in performance monitoring, you should:

These dynamic project forecasting capabilities help you to make data-driven decisions and adjust resources accordingly.  

You’ll need to utilize Earned Value Management techniques and employ effective communication strategies when unexpected costs pop up.  

When confronting unexpected expenses, you’ll want to recalculate your estimations using the Cost Performance Index (CPI) while maintaining regular risk assessments.

Consider choosing and implementing project management software to make your calculations better (and faster) and monitor cost variations in real-time.

You should also engage stakeholders throughout the process, keeping them informed with budget reports that explain why adjustments have been made and how this impacts the project timelines.  

The biggest benefit of an evolving EAC model is that it enables dynamic resource allocation while providing vital insights for stakeholder communication and risk mitigation.

Here’s what it does for your budget forecasts:

The best tools for EAC management are specialized cost estimation software that integrates with your existing project management systems. These tools offer real-time data analysis and automated calculations for more precise EAC forecasting. 
 
To maximize the effectiveness of these tools, you should implement best practices such as establishing consistent data entry protocols, setting up automated alerts for cost variances, and maintaining detailed documentation of all estimation assumptions and methodologies.  

Project management software revolutionized how project planners handle their estimation calculations and monitoring.  

These sophisticated tools integrate real-time data analytics with automated reporting systems, ensuring you’ll always have accurate, up-to-date forecasts at your fingertips.

Your final estimation management becomes more efficient through automated variance analysis and collaborative features that encourage stakeholder communication.  

Spreadsheets and specialized estimating apps are most often used for cost estimation, while simulation tools help you model various scenarios. When you’re working on complex projects, you’ll want to integrate statistical tools to analyze historical data and make better predictions.  

Project management software brings these components together, allowing you to combine different estimation methods like bottom-up calculations and parametric modeling for thorough cost management.  

The best practices for EAC tracking are to use project management software, conduct regular risk assessments, and integrate performance metrics like CPI and Schedule Performance Index into your calculations.

Here’s a short overview of the best practices and their impact on your cost tracking.

Manual data entry often leads to errors or delays, which can distort your forecast. Automating data inputs from time tracking, cost logs, and resource usage ensures your calculations are always based on real-time, accurate data.

This helps you respond faster to cost variances and prevents outdated figures from skewing projections.

Projects evolve, and so do the risks and associated costs. By running structured risk assessments at key milestones and updating cost estimations accordingly, you make sure your final calculations reflect current realities—not outdated assumptions.

This keeps your forecasts relevant, and your project team prepared for possible changes.

Your estimations become more meaningful when you base them on real performance data. Using Cost Performance Index (CPI) and Schedule Performance Index helps you factor in how efficiently your project is running—both in terms of cost and time.

This leads to better predictions and helps you identify under-performing areas early.

Relying only on high-level estimates can overlook the true cost of specific tasks. Combining top-down projections with detailed, bottom-up cost assessments for remaining work gives you a clearer picture.

This dual approach strengthens accuracy and highlights where adjustments are needed most.

Waiting until problems appear often means you’re too late to fix them. By establishing a consistent estimation review rhythm (e.g., weekly or at each project phase), you create an early warning system that helps you catch budget issues before they escalate.

This builds financial discipline into your project workflow.

Without documentation, your estimation becomes a black box. Clearly record how you arrived at each estimation—what data you used, which formula you applied, and why. This makes your projections easier to validate, improves transparency with stakeholders, and allows for quicker re-calibration if conditions change.

EAC is not just a project control tool—it’s also a communication tool. Sharing updates with decision-makers helps set realistic expectations, supports better funding decisions, and strengthens stakeholder trust. Make sure your reporting explains not just the numbers but what they mean and what actions are needed.

Every project manager needs to master the discussed estimation calculations. Regularly monitoring and updating your estimations equips you better to make the best decisions, communicate effectively with stakeholders, and implement corrective actions when needed.

Remember that EAC isn’t just a number—it’s a powerful tool that guides your project toward successful completion.

If you’re stuck bouncing between spreadsheets, multiple tools and inaccurate estimations you should definitely book a short 30-min demo with Productive.