Variance at Completion (VAC)
Variance at Completion, or VAC, is a forecasting number that answers a simple but important question: "When this project is all finished, will we come in over budget or under budget, and by how much?" It measures the expected gap between what you originally planned to spend and what you now realistically expect to spend.
To calculate it, you subtract two figures. The first is the BAC, or Budget at Completion — this is the total budget you approved for the whole project at the very start. The second is the EAC, or Estimate at Completion — this is your updated, best-guess forecast of what the project will actually cost by the time it ends, based on how spending is going so far. VAC = BAC − EAC.
Here is how to read the result. A positive VAC is good news: it means your forecast cost (EAC) is lower than your budget (BAC), so you expect to finish under budget with money to spare. A negative VAC is a warning: you expect to spend more than you budgeted and will finish over budget. A VAC of zero means you expect to land exactly on budget.
A project manager uses VAC to give sponsors and stakeholders an early heads-up. Rather than waiting until the money runs out, VAC lets you say months in advance, "At this rate we'll be about $10,000 over," so decisions — like cutting scope, adding funds, or fixing inefficiencies — can be made while there is still time to act.
Think of it like planning a road trip. Your BAC is the amount of fuel money you set aside before leaving. Partway through, you notice you're burning fuel faster than expected, so you re-estimate what the whole trip will cost (your EAC). VAC is simply that comparison — it tells you in advance whether you'll pull into the driveway with cash left over or need to borrow from your emergency envelope.
Imagine you are managing an office renovation with an approved total budget (BAC) of $100,000. A few months in, based on how costs are actually trending, your updated forecast of the final cost (EAC) comes out to $110,000. Apply the formula: VAC = BAC − EAC = $100,000 − $110,000 = −$10,000. The result is negative, which tells you that if nothing changes, the project is projected to finish $10,000 over budget. That is your cue to investigate the overspending now and talk to your sponsor about either trimming some work or requesting extra funds.
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