Cost Management

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Cost Management

Cost management in the construction industry is the process of planning, estimating, budgeting, and controlling costs to ensure a project is completed on budget. It’s important to keep costs under control because poor cost management can lead to delays, quality issues, and financial losses.

Here are some elements of construction cost management:

Some other things to consider when managing construction costs include:

Pre – Contract

A process to ensure that a construction project’s costs remain within the client’s budget. It involves planning and controlling costs throughout the project’s duration. Some key aspects of pre-contract cost management include:

Key Highlights

To prepare a bill of quantities (BOQ) for a construction project, you can follow these steps:

Define the scope of work
Collect project documentation
Break down the project
Itemize and categorize
Quantify and cost
Quality control
Comply with standards
Continue using the BOQ

A BOQ helps the owner and bidding contractors: Understand the price of completing the construction work, Know which bids are competitive, and Estimate their profit margins.
Architects and engineers usually create the BOQ, but more companies are using BIM software.

Cost plans help to:

Some other cost control strategies include:

Post – Contract

Post-contract cost management in the construction industry involves a number of methods and techniques to ensure that projects are completed on budget and within scope:

Key Highlights

They involve:

Here are some other important aspects of cost management in construction:

Here are some other cost management strategies for construction projects:

Variance analysis helps construction companies:

A cost variance report is a key output of variance analysis. It provides a detailed comparison of the project’s actual expenses to the planned budget at different stages of the project. This helps project managers and stakeholders understand the project’s financial health and take action to minimize cost overruns.