Construction projects are notorious for being late and over budget. This is especially true for megaprojects, such as the International Space Station, which went an incredible $68.25 billion over budget. The most effective way to reduce the amount of setbacks in any project is to practice good cost control in construction management.
However, this is a lot easier said than done, so below we’ll go over what cost control is and some of the key procedures involved. We’ll also inform you of how mobile technology is the best solution to easing and improving the process, enabling your company to save even more time and money.
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What is Cost Control
Learning how to cost control in construction management is one of the most important responsibilities for a project manager or construction manager. According to Wrike, cost control is defined as, “the task of overseeing and managing project expenses as well as preparing for potential financial risks.” In order to effectively manage the budget, there is a lot of planning involved. Like previously stated, construction projects are prone to setbacks and other financial risks, so planning ahead is essential to being prepared in the event a setback occurs.
Effective cost control in construction management is centered around practicing good cost control procedures. These procedures are in place to ensure time estimates and cost forecasts are in line with the progress of the project. Below we’ll outline what steps you should take to effectively cost control your project.
Typical Cost Control Procedures
Preliminary Cost Estimation
In the early stages of a project, it’s a good idea to hire an experienced project manager or construction manager to go over the preliminary plans. Even the most experienced architects and engineers can make mistakes in planning and budgeting. So with the help of a project manager, they can review the plans, check for errors, and make the revisions necessary to stay on budget before submission.
After the final plans are in place, the project manager and accountant should review the plans one last time to make detailed estimates on labor, materials, and overhead. Detailed estimates on timelines should also be made at this point.
Construction Cost Roadmaps
After making detailed estimations, the project manager and accountant should prepare a schedule with detailed cash flow estimates. The schedule is based on the final plan and is called the construction roadmap. The roadmap allows for progress on any activity to be compared with the project timeline, making it easier to spot potential budget overruns and delays before they occur.
Forecasting for Cost Control
In order to effectively cost control in construction management, the project manager must be able to forecast future costs. One way to do this is to set completion schedules and keep track of them through creating several milestones along the way. As each milestone is reached, the project manager will get a better glimpse as to how the project is meeting time and budget requirements. If a delay or overage in the budget occurs, certain adjustments can be made for each of the remaining milestones in order to reverse what caused the problem in the first place. The project manager can also look for ways to recover the overage by reducing costs in other categories of the project budget.
Using Mobile Technology to Improve the Cost Control Process
As you can tell, there is a lot that goes into effective cost control in construction management. The best way to ease the process is to invest in a project management software with mobile capabilities. Mobile technology allows for greater efficiency in cost control through the advantage of real-time data. This instant access enables workers to track financial progress on the spot rather than going through paperwork later in the day, also making it more accurate. Important documents like daily reports and purchase orders also become much more accessible, allowing for workers to have control whether they’re in the field or the office.
From reading this article, you should have a much better idea of what cost control in construction management is, and all the different procedures that go into an effective plan. It’s important to remember that cost control in construction management is made much easier with mobile technology, improving the process through better accuracy and instant access with real time data. Be sure to check out how a project management software can help your business to improve its overall efficiency through effective cost controlling.