5 Tips for Construction Cost Control

Construction cost control helps project managers avoid cost overruns by providing guidelines for estimates and forecasts of labor, material, and overhead costs. The purpose of a cost control plan is to help ensure the project is delivered on time, within scope, and on budget. Cost reporting is typically based on factors such as future cash flows, anticipated final costs, and current project costs.

construction cost control
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Preliminary Cost Estimation

Before developing concrete plans, cost estimates are the primary source of determining the funding intent of a project. However, not everyone in construction can estimate costs accurately. ‌ ‌Inaccurate cost estimations can have severe consequences on the outcome of a project and can even cause profit margins to disappear entirely. Because of this, it’s a worthwhile investment to pay a premium to hire a construction manager with expertise and a good track record with cost estimation.

Construction Cost Control

After submitting final plans for a project, you can make more detailed estimates of cost, which account for labor, materials, and time. It’s crucial to account for time in cost estimation because delayed projects that end up going over budget with labor and other unexpected costs. It is essential to consider more than just past financial records to come up with an accurate and detailed cost control plan. You should also estimate future costs, revenue, and technical problems as well as to account for inflation.

construction cost control
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1. Use construction management software

Using construction management software with data management capabilities helps with updating everyone on the job site on any changes to the scope of the project. And these happen frequently.  It also helps connect back-office staff with workers on the job site to ensure an active line of communication across everyone involved in the project.

Using mobile construction management software is the perfect solution for the highly mobile workforce of varied skilled experts vigorously working on a constuction build. From subcontractors to architects, each person can access one central system to see project plans and determine if it is necessary to make adjustments to the cost plan. For example, if a drywall subcontractor needs to push back a wall and determines it will require extra time or materials, they can instantly upload that request on the software. Inputting this information would make all workers on the job site immediately aware of the changes to the scope and ensure there are no miscommunications that lead to delays or budget overruns.

2. Regularly update cost plan

Consistently analyze and reevaluate cost plans to determine if it is necessary to make any alterations. If costs are higher than expected in one aspect of the process, make sure to balance it out by reducing costs in another area. Additionally, remember that costs can be altered because of outside forces as well. External factors such as inflation or a shortage of materials can cause prices to change, and therefore, a project that may have been within budget before could now be over budget. Another benefit of having construction management software that is integrated with the accounting program provides stakeholders with real-time labor productivity and costs data to make smart decisions. 

construction modeling
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3. Consistently submit cost reports

Ensure you are consistently providing cost reports to the client to help keep them informed and satisfied with the progress on the project. Doing this also enables you to check the cost report against the cost control plan to determine the financial health of the project.

Cost reports are essential to help streamline communication between owners, general contractors, and subcontractors. By updating management with real-time progress reports (e.g., Daily Reports) on a construction project, cost reports help identify early on if any delays or unplanned budget overruns may occur.

4. Prepare and review contingency plans

By having set risk management procedures, project managers can plan for delays and budget overruns and have a set plan of action on how to remedy the issues ahead of time. Contingency plans help prevent having to pay premiums to get the project done on time when something goes wrong at the last minute.  For example, construction management software can provide statuses of important submittals, RFIs, Change Orders, etc., which can signal the project has a bottleneck and unexpected major delay about to occure. 

It’s important to note than contingency plans are based on an evaluation of possible risks. They are not intended to cover changes to the scope of a project based on changing opinions or specifications. An intended change to the scope of a project should be balanced out by reducing the budget in another area, not relying on a contingency budget.

Construction material
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5. Encourage project team to design within the cost plan at all stages

Make sure you are following design development control procedures. For example, there is a general rule that 80% of the cost is determined by design and 20% by construction. Additionally, make all team members aware that no team member has authority to increase costs in elements of the work without balancing it out in another area. Lastly, ensure each worker understands that construction plans are created per the total budget, and making changes could result in unplanned costs that exceed the projected budget.


Cost control plans are an essential part of planning a construction project. They can be the determining factor of whether a contractor can make a profit on the project. Having an accurate cost control plan and development budget is necessary to ensure a project is a success. Essentially, using cost control procedures is vital to ensure a project is delivered on time, within scope, and on budget.