Vessel Finance

Budget vs actual, forecast.

A vessel’s annual budget is a number on a spreadsheet until you start spending it. Once spending starts, the question shifts: “are we tracking, and if not, where is the variance coming from, and will it close out the year over plan?“

pro-rata accountingyear-end forecastNB fund balancecost-driver attributionvariance shape

Three numbers

Number	What it answers
YTD variance	Are we over or under against where we should be right now?
Year-end forecast	If nothing changes, where do we close out the year?
NB fund balance	Is there cash to keep operating?

The Vessel Finance pipeline computes all three on a rolling basis, drills to the cost categories driving the variance, and surfaces the fund-balance position so a Technical Superintendent can act before the month-end close.

Pro-rata: the trick everyone gets wrong

Comparing month-to-date spend against one-twelfth of the annual budget produces nonsense. Drydocks land in a single month; surveys cluster around certificate cycles; lube-oil bunkering happens at port calls. The pipeline uses category-aware pro-rata:

B_prorata(t) = B_annual × f_category(t)

Variance_prorata = Actual_YTD − B_prorata(t)

f_category(t) is the cumulative fraction of the annual budget expected to have been spent by time t. Crew uses a linear profile; Drydock uses a step function around the planned drydock month.

A vessel “10% over annual budget” looks alarming until pro-rata accounting shows it’s within 2% of the expected curve because the drydock landed in March.

Worked example — MV POSUN

2026 budget year, reviewed end of April:

View	Number	Verdict
OPEX YTD pro-rata variance	+$48,300 (+8.4%)	Watch
Year-end forecast	+$112,000 (+11.7%)	Over — escalate
Top variance driver	Lube Oil +$16,400 (Singapore bunker Apr-12)	—
Second driver	Repairs +$22,800 (turbocharger overhaul March)	—
Third driver	Stores +$9,100 (consumables uptick)	—
NB fund closing	$1.2M positive	Healthy
DD fund vs planned	$340k vs $850k planned	Underfunded
Per-day OPEX	$4,150	$50 over fleet median

Verdict: HIGH on year-end forecast — projecting +12%, primarily repairs and the Singapore bunker outlier. DD funding gap routes to owner / commercial for attention.

Under the hood

Pro-rata implementation

def prorata_calculation(row, env):
    """Compute the pro-rata budget for a row given category and current period."""
    category    = row["category"]
    period_end  = row["period_end_date"]
    annual_bud  = row["annualBudget"]
    today       = datetime.utcnow() if env != "test" else datetime(2025, 11, 20)

    # Choose the time profile by category
    profile = CATEGORY_PROFILES.get(category, "linear")
    if profile == "linear":
        elapsed  = (today - row["budget_start_date"]).days
        total    = (period_end - row["budget_start_date"]).days
        fraction = elapsed / total
    elif profile == "drydock":
        # Step function — full allocation lands in planned drydock month
        fraction = 1.0 if today >= row["drydock_month"] else 0.0
    elif profile == "lubeoil_quarterly":
        # Quarterly lumps tied to typical bunker calls
        fraction = quarterly_fraction(today, row["budget_start_date"])
    else:
        fraction = elapsed / total

    return annual_bud * fraction

The reviewer doesn’t see this calculation. They see one number: variance against the expected curve.

Year-end forecast logic

Forecast_YE = Actual_YTD + burn_rate_recent × Months_remaining

burn_rate_recent is the average monthly spend over the last 3 months.

Forecast vs annual budget	Tier
≤ +5%	On track
+5% to +10%	Watch
+10% to +25%	Over — escalate
> +25%	Critical — re-forecast required

A vessel forecasting -15% under budget is also flagged — that usually means deferred maintenance storing up future cost, not genuine savings.

Cost-driver attribution — the transaction detail

When a category is over budget, the analyzer ranks the underlying transactions:

LUBE OIL  — Annual budget $84,000  ·  YTD pro-rata $42,000
           Actual $58,400  ·  Variance +$16,400 (+39%)

Top drivers:
   1. PO LUB-2026-04-118  Singapore bunker         $12,200
   2. PO LUB-2026-02-073  Cylinder oil × 4 drums    $4,800
   3. PO LUB-2026-03-091  System oil top-up         $1,200

“Lube oil over by $16k” can be a budgeting error, a price spike, a one-off bunker, or systematic overconsumption. The driver list collapses the ambiguity: “Singapore bunker drove most of it.”

Variance shape classification

Different variance shapes mean different things:

Pattern	Likely cause
Single-month spike, returns to baseline	One-off event (drydock, bunker, repair)
Rising trend across 3+ months	Structural — price inflation, aging equipment, over-consumption
Stable variance, growing absolute number	Volume — more vessel days, more activity
Falling variance	Recovery or under-spend (check for deferred work)

The pipeline classifies the variance shape and adds it to the verdict so a TSI knows whether they’re chasing an event or a trend.

The five tables a reviewer reads

The Committed Cost Summary assembles five views:

OPEX Current Month — spend vs pro-rata monthly budget; the most-recent-data view.
OPEX Previous Month — closed prior month for trend comparison.
NB (Newbuilding fund) — opening balance, receipts, expenses, closing balance.
DD (Drydock fund) — reserve status (accumulating or drawn down) vs planned drydock cost.
PD (Periodic drydock) — periodic drydock provision tracking.

A reviewer reading all five together can spot an OPEX overrun being absorbed by an underfunded DD reserve — a problem invisible in any single view.

NB fund and per-day OPEX

NB fund balance tracks a separate ledger from OPEX:

Closing balance = Opening + Receipts − Expenses

A vessel with NB fund running negative is a cash issue, not a budget issue — usually visible weeks before the month-end close.

Per-day OPEX answers “what does this vessel cost per operating day?”:

Per-day OPEX = OPEX_YTD / Operating_days_YTD

Comparable across vessels of the same type. A vessel at $4,200/day where the fleet median is $3,600/day is structurally more expensive — usually older equipment, higher repair burden, or longer port stays.

Escalation triggers

Trigger	Severity
Year-end forecast breach > 25%	CRITICAL
Year-end forecast breach > 10%	HIGH
NB fund balance turning negative	CRITICAL
DD fund underfunded vs planned drydock with < 90 days	HIGH
Single category overspend > 25%	HIGH
Rising variance trend across 3+ months in any category	HIGH
Unbudgeted spend on safety-critical items	CRITICAL