Planned value (PV) in project management: Formula, examples, and best practices

You’re 3 months into a critical project when leadership asks: “Are we on track?” You scan your status report and realize 60% task completion doesn’t answer the real question — are you delivering 60% of the value?

This is where planned value becomes essential, showing exactly how much budgeted value of work should be completed by any date. This transforms your timeline into a financial roadmap for expected value delivery — not actual spending — that executives understand immediately.

This guide walks you through calculating planned value with precision, helping you sidestep common measurement traps and leverage PV data for decisions that keep projects on track. You’ll discover how to establish reliable baselines, interpret variance signals before they become critical issues, and use performance insights to align projects with strategic goals.

Key takeaways

• Planned value defines how much work should be completed by a specific date, giving you an objective benchmark to measure actual performance against your original plan.
• Comparing planned value to earned value on a weekly or biweekly basis helps you identify schedule risks early enough to correct course before delays escalate.
• Planned value is calculated by multiplying your total project budget by the percentage of work that should be completed by the reporting date.
• Planned value should always be based on the approved baseline plan, never actual progress data, and only updated when formal scope or schedule changes are approved.
• With monday work management, you can automatically calculate planned value and surface performance insights through AI-powered dashboards that highlight risks and recommend corrective actions.

What is planned value in project management?

Planned value (PV) is the authorized budget assigned to scheduled work within a specific timeframe. It represents the baseline against which all project performance is measured, showing the budgeted value of scheduled work that should be completed by any given date — independent of actual spending or real progress.

Think of PV as your project’s financial roadmap. It translates your project schedule into budget terms that executives and stakeholders understand immediately. When you know your PV at any point, you know exactly where your project should be financially.

In construction, for example, PV shows the budgeted value of work scheduled through today’s date, regardless of how much has actually been spent. A $10 million building project scheduled for 12 months would have a PV of approximately $5 million at the 6-month mark, assuming linear spending. In software development, PV tracks the budgeted value of features scheduled for completion by each sprint or release date.

This distinction matters because PV reflects the approved baseline plan (what was scheduled to happen) not actual performance or spending. It doesn’t measure actual spending or real progress. Those are different metrics entirely. PV creates the performance standard that makes meaningful project analysis possible.

The role of planned value as your project baseline

PV grounds your entire project control system by merging scope, schedule, and budget into one timeline-based number you can actually track. This baseline establishes exactly what “on track” means for any project at any point in time.

Without PV, project managers lack an objective standard for measuring performance. You’re left comparing actual costs to total budget without understanding whether spending aligns with schedule progress. PV’s timeline approach really shines when your project doesn’t spend evenly — like when you’ve front-loaded resources or built your schedule around key milestones.

A project might allocate 60% of its budget to the first 3 months and 40% to the remaining 9 months. PV captures this reality, showing that 3 months into the project, the team should have completed work worth 60% of the total budget. This precision prevents the false assumption that projects should spend budget evenly across their duration.

Why planned value matters for project success

PV enables proactive project management by providing early warning signals before schedule and budget deviations become critical. When project managers compare PV to earned value weekly or biweekly, they spot trends that indicate future problems with enough lead time to implement corrective actions before stakeholders notice issues.

PV isn’t just about keeping one project healthy—it transforms how your entire organization delivers work. Here’s how PV drives organizational success across multiple dimensions:

• Contract compliance and audit readiness: Government contracts and large enterprise agreements often require Earned Value Management System (EVMS) compliance, which depends on accurate PV tracking. For Department of Defense acquisitions, EVMS is required on cost or incentive contracts at $20 million or more.
• Risk mitigation through variance analysis: PV creates the denominator for Schedule Performance Index (SPI) calculations, which quantify schedule efficiency.
• Resource optimization across portfolios: Portfolio managers use aggregated PV data to identify resource allocation inefficiencies across multiple projects.
• Data-driven stakeholder communication: Executives and sponsors understand budget and schedule in financial terms, and PV translates project status into the language of business value.

What is earned value in project management?

Understanding earned value alongside planned value creates the complete picture of project performance. Earned value (EV) measures the budgeted value of work actually completed by a specific date. Unlike PV, which shows what should be done, EV shows what has been done, expressed in budget terms rather than actual costs.

A project with a $500,000 budget that completes 40% of its scope has an earned value of $200,000, regardless of how much money was actually spent. If that same project spent $250,000 to complete that 40%, the earned value remains $200,000. The actual cost becomes a separate metric used for cost performance analysis.

EV calculation requires accurate assessment of work completion, which varies by industry and project type. Construction projects often use physical measurement methods, calculating EV based on cubic yards of concrete poured or square feet of space completed. Software projects might calculate EV based on story points completed or features deployed to production.

How earned value reveals true project progress

EV provides the only objective measure of project progress that accounts for both scope and value. Percentage-complete estimates often mislead because they don’t weight tasks by their budgeted value. A project might be 50% complete by task count but only 30% complete by value if the remaining tasks consume more budget.

The relationship between EV and PV reveals schedule performance with precision:

• EV = PV: Project delivers exactly the planned value on schedule
• EV > PV: Project runs ahead of schedule
• EV < PV: Project lags behind schedule

This schedule performance insight works independently of cost performance. A project can be behind schedule while staying under budget, or ahead of schedule while over budget. The separation of schedule and cost analysis enables targeted corrective actions.

How to calculate earned value accurately

EV calculation starts with the formula: EV = BAC × Actual % Complete, where BAC represents Budget at Completion and Actual % Complete measures real work completion. The challenge lies in determining actual percentage complete objectively, without optimism bias or subjective assessment.

The weighted milestone method provides one of the most reliable approaches for EV calculation. This method assigns budget value to specific, verifiable milestones and calculates EV by summing the value of completed milestones.

Alternative calculation methods include:

• 0/100 rule: Credits no value until a work package completes entirely
• 50/50 rule: Credits 50% of a work package’s value when it starts and the remaining 50% when it completes

Planned value vs. earned value: Understanding the critical differences

The gap between PV and EV tells the real story of your project. Your plan lives in PV. What you’ve actually accomplished lives in EV. The gap between them reveals whether projects deliver value on schedule, independent of how much money they spend.

Let’s clarify exactly how these metrics differ and complement each other:

Understanding schedule performance through PV and EV

Schedule variance (SV) quantifies the difference between earned value and planned value: SV = EV – PV. This calculation reveals schedule performance in budget terms, showing the dollar value of work that’s ahead of or behind schedule.

The Schedule Performance Index (SPI) converts this variance into a ratio: SPI = EV / PV. An SPI of 1.0 means the project performs exactly on schedule. An SPI of 1.15 indicates the project runs 15% ahead of schedule. An SPI of 0.85 shows the project lags 15% behind schedule.

SPI provides more actionable insight than SV because it normalizes performance across projects of different sizes. A $10 million project with an SV of -$500,000 shows the same schedule efficiency as a $1 million project with an SV of -$50,000. Both have an SPI of 0.95.

When PV and EV diverge: What it means for your project

The gap between your PV and EV exposes your project’s true health status. When EV consistently tracks below PV, the project systematically underdelivers against its schedule. This pattern suggests fundamental issues with resource availability, scope definition, or baseline accuracy.

When EV exceeds PV significantly, the project either benefits from exceptional team performance or suffers from an unrealistic baseline. Sustained EV performance 20% or more above PV often indicates the original schedule was too conservative.

Convergence of EV and PV over time indicates a maturing project where initial schedule optimism or pessimism gives way to realistic performance patterns. The trend matters more than point-in-time measurements. Improving SPI over 3 consecutive measurement periods suggests corrective actions are working, even if the project hasn’t fully recovered to baseline schedule.

5 steps for calculating planned value

When you calculate PV, you’re converting your schedule into a financial roadmap that makes measuring real performance possible. The process requires accurate budget data and realistic schedule information, both approved by stakeholders before becoming the performance baseline. Follow these 5 steps to nail your PV calculations and get performance insights you can actually use.

Step 1: Establish your budget at completion (BAC)

Budget at Completion represents the total approved budget for the project or work package being measured. BAC includes all authorized costs for scope completion but excludes management reserves held for unknown risks.

For a software development project, BAC includes:

• Developer salaries
• Software licenses
• Infrastructure costs
• Testing resources
• Deployment expenses directly tied to delivering the defined scope

It excludes contingency funds held for potential scope changes or undefined risks. If the project budget totals $1.2 million but includes $200,000 in management reserve, the BAC equals $1 million.

Step 2: Determine planned percentage complete

Planned percentage complete shows how much of the total work should be finished by the measurement date according to the baseline schedule. Three primary methods calculate planned percentage complete:

• Time-based calculation: Divides elapsed time by total project duration
• Milestone-based calculation: Assigns percentage values to specific milestones
• Work-based calculation: Uses planned work hours or resource allocation

Each method suits different project characteristics. Time-based works for uniform work distribution. Milestone-based provides accuracy for projects with distinct phases. Work-based fits projects where resource effort correlates directly with value delivery.

Step 3: Calculate planned value using the formula

The PV formula multiplies BAC by planned percentage complete: PV = BAC × Planned % Complete. This calculation produces the budgeted value of work that should be complete by the measurement date.

A project with BAC of $800,000 and planned percentage complete of 35% has PV of $280,000. This means the project should have completed work worth $280,000 by this point in the schedule.

For projects measured at the work package level, calculate PV separately for each work package and sum the results for total project PV.

Step 4: Validate and document your baseline

After your calculations, don’t skip this critical step: get formal sign-off on your PV baseline before you start measuring against it. Documentation should include:

• The assumptions underlying the PV calculation
• The method used to determine planned percentage complete
• Any constraints or dependencies that could affect baseline accuracy

Teams using monday work management can streamline baseline documentation through customizable project templates that capture all relevant baseline information on one platform. The platform allows teams to attach supporting documents, link to schedule details, and maintain a complete audit trail of baseline approvals.

Step 5: Establish your monitoring cadence

PV tracking only delivers value when measured consistently against actual performance. Most organizations measure PV weekly or biweekly for high-risk projects and monthly for standard projects. The monitoring frequency should align with the project’s pace of change and the organization’s ability to respond to variances.

Each measurement cycle should answer 3 questions:

1. Are we on schedule according to PV?
2. If not, what’s driving the variance?
3. What corrective actions will bring us back to baseline?

Best practices for accurate planned value tracking

Understanding common PV calculation and interpretation errors helps organizations implement more effective performance measurement systems. These mistakes often stem from misunderstanding what PV represents or how it relates to other project metrics. Avoiding these pitfalls ensures your PV tracking delivers accurate performance insights.

Here are some of the most frequent calculation errors:

• Using actual progress instead of planned progress: All PV calculations should reference the approved baseline plan established earlier. Using actual progress data in PV calculations eliminates the variance that makes performance analysis possible.
• Treating PV as a spending limit: Project managers sometimes restrict spending to stay at or below PV, not recognizing that PV measures scheduled work value, not authorized spending. A project might legitimately spend more than PV if it accelerates work to recover from earlier delays.
• Failing to update baselines for approved changes: When stakeholders approve scope additions or schedule extensions, the baseline must be revised to reflect the new plan. However, baseline changes should be controlled and documented. Frequent baseline revisions suggest poor initial planning or inadequate change control.

How planned value enables portfolio-level insights

While individual project PV tracking provides valuable performance data, aggregating PV across multiple projects unlocks portfolio-level insights that drive strategic decision-making. Portfolio managers use consolidated PV data to identify systemic issues, optimize resource allocation, and ensure projects align with organizational priorities.

Portfolio-level PV analysis reveals patterns invisible at the project level. When multiple projects show similar PV variances, it often indicates organizational issues rather than project-specific problems. If 80% of IT projects show negative schedule variance in their first quarter, the organization might have unrealistic ramp-up assumptions or inadequate resource onboarding processes.

Resource optimization becomes more sophisticated when portfolio managers can see PV performance across all projects simultaneously. Projects ahead of schedule might have excess resources that could accelerate struggling projects. Without portfolio-level PV visibility, these optimization opportunities remain hidden.

Organizations using monday work management gain portfolio-level visibility through aggregated dashboards that display PV data across projects. The platform’s Portfolio Risk Insights feature automatically identifies patterns and risks that require management attention, enabling portfolio managers to intervene before individual project issues cascade into portfolio-level failures.

Maximize project success with planned value tracking

When you track planned value consistently, you stop chasing status updates and start steering projects with real-time performance data. Consistently tracking PV against EV gives teams an objective, repeatable way to detect schedule risk and forecast outcomes.

Integrated work management platforms eliminate the administrative burden of PV tracking while enhancing analytical power through automation and AI. With monday work management’s automated dashboards, you can visualize PV, EV, and AC in real time, while AI-powered insights flag deviations early, predict potential overruns, and recommend corrective actions. Teams gain the visibility they need to act before issues escalate, transforming PV from a lagging indicator into a forward-looking management tool.