Why your budget spreadsheet hides over-commitment

What over-commitment is

Every signed contract is a promise to pay. The part of it that falls in a year is that year's committed money. When the committed money for a project and year is greater than the approved budget, the project is over-committed: it has promised more than it may spend, even if almost nothing has been spent yet.

Overspend (actuals above budget) is the same problem, found later. By the time the work is accepted, the contract is signed and the money is owed. Over-commitment is the point where someone can still renegotiate, re-phase, move budget or ask for more.

For what the three numbers mean, see budget vs committed vs actuals.

An example

Project GAMMA has a 2026 budget of 800,000 EUR. At the end of September:

The budget vs actuals report says GAMMA has used 37.5% of its budget with a quarter of the year left, so it looks underspent. But its contracts already commit 950,000 to 2026. Uncommitted is −150,000. Unless something changes, GAMMA will end the year at least 150,000 over budget, and the report won't say so until December.

Six places it hides

1. There is no committed column

The most common budget report has two columns: budget and actuals. Contracts live in a separate register, kept by someone else, and never meet the budget. Nobody computes budget − committed, so nobody sees it go negative.

2. Contracts are counted by signing date

When the register does feed the budget, it often takes each contract's full value in the year it was signed. A multi-year contract then over-commits the signing year and hides itself from the years that will pay for it. The fix is annual phasing.

3. The phasing doesn't add up

A contract of 400,000 phased as 250,000 in 2026 and 100,000 in 2027 is missing 50,000. Usually a contract was amended and only the total was updated. The missing amount is committed in no year at all.

4. Formula ranges stop short

=SUMIFS(H2:H200, B2:B200, "GAMMA") works until the 200th contract is added in row 201. Nothing turns red; the new contract just isn't counted. Inserted rows, sorted ranges and copied sheets do the same.

5. The project total hides a category

GAMMA's budget might split into 200,000 for licences and 600,000 for services. If licence contracts total 260,000 and services 450,000, the project is within budget overall (710,000), but licences are over-committed by 60,000. If the categories are approved separately, that is a real overrun.

6. The portfolio total hides a project

A portfolio of ten projects can be 2 million under-committed in total while one project is over. Portfolio slack doesn't help a project whose budget is approved on its own. Report uncommitted per project and year, then sum.

A monthly check you can run

With contracts phased by year in a table named Contracts (columns Project, Value, and one per year), add these to the project summary and format negative results red:

And run these checks once a month, before the numbers go to anyone:

1. Each contract's year allocations add up to its value.
2. No contract has more acceptances than its value.
3. No contract has more acceptances in a year than its allocation for that year.
4. Every acceptance is dated within its contract's start and end dates.
5. No project is over-committed for the year, in total or in any budget category.

Use Excel tables (Insert → Table) rather than fixed ranges, so new rows are counted. Our free portfolio budget tracker is laid out this way and contains two deliberate errors (acceptances over a contract's value, and a phasing that doesn't add up) for you to find.

When over-commitment is allowed

Sometimes it is deliberate: a budget increase is on its way, a contract will be re-phased into next year, or another project has agreed to give up budget. That is fine, as long as it is a decision someone made and wrote down. The danger is the over-commitment nobody saw, which is what the checks above are for.