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Last edited 26 Nov 2021
Cost management techniques used to monitor the cost of construction projects
Cost management strategies must be utilised in construction to monitor and control the cost and profitability of the project so that the construction team does not go over budget and miss their deadlines. There are several methods for preventing this, which will be discussed in the following paragraphs.
Cost management has an impact on planning and design, estimation, on-site specialty contractors, change orders, and, of course, the finished product. It may also help your team establish a reputation for being proactive, efficient, and exact when estimating and executing a project budget.
A construction budget is an estimate of the amount of money required to execute a project from start to end, considering all associated costs and expenses. While the budget is an attempt to estimate all expenses connected with a construction project, you should leave some room to accommodate for any unexpected construction costs.
Construction project managers start with the project plan, which is most often a blueprint, to identify what materials are required. Costs associated with job site preparation, such as demolition, equipment rentals, permitting, and inspection fees, must all be considered
To estimate the project's overall expenditures and prospective returns, a development budget analysis is done. A cost plan includes all construction costs as well as any other project costs such as professional fees and uncertainties.
All expenditures contained in the cost plan will be included in the development budget, in addition to the developer's returns and other unnecessary stuff such as project insurance, surveys, and agent's or other specialised advisers' fees. The goal of the cost plan is to allocate the money to the project's major components in order to provide the basis for cost control. Budget and expense plan are phrases that are frequently used equally.
Consolidating cost-control operations such as budget and contract management, payment applications and change orders into a single platform may help reduce risk and provide a true image of a project's financial condition.
Another benefit of a construction management solution is increased visibility. Team members may get an overview of all budget items and contracts, as well as a clear representation of income, costs, prediction, and variation for each item, thanks to cloud-based project management tools.
Quantity surveyors give specialised cost control, procurement and management assistance to project stakeholders throughout the project's lifespan to maximise profitability. Experienced cost managers provide value management by monitoring the costs and risks involved, based on their vast understanding of the market and the building industry.
A quantity surveyor's other job titles include 'cost consultant,' 'commercial manager,' 'cost manager,' and 'cost engineer.' Whether a quantity surveyor is working on the design or construction stage of a project, the responsibilities they do will change.
Created by Adam H.
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An invaluable technique that should be used more often.