Five Tips To Consider For Construction Cost Control
Construction cost control can help project managers to avoid cost overruns by providing guidelines for estimates and forecasts of material, labour and overhead costs. With a cost-control plan, make sure that your project is delivered on time, within scope, and on budget
Preliminary Cost Estimation
Before plans are developed, cost estimates are the main source of determining the funding intent of a project. However, not everyone can estimate these costs accurately. Cost estimations that are inaccurate can have major consequences on the outcome of a project and can cause profit margins to shrink drastically. Due to this, it’s worth investing in hiring a construction manager with expertise in cost estimation, and construction and engineering cost management.
After submitting final plans for a project, you can make a more detailed estimate of costs, which take materials, labour and time into account. It’s essential to account for time in cost estimation, as delayed projects that go over budget on labour can run up high unexpected costs.
It’s important to look at more than just past financial records to come up with an accurate and detailed cost control plan. Estimate future costs too, along with revenue and technical problems.
Construction Management Software
Construction management software with data management capabilities helps to update everyone on a job site on any changes to the project scope. It can also help to connect back-office staff with those working on-site, ensuring an active line of communication between everyone on the project.
Mobile construction management software is the ideal solution for a highly mobile workforce working on a build. Everyone, from subcontractors to architects, can access one central system to see project plans and decide if adjustments to the cost plan are needed. For example, if the subcontractor fitting drywall needs to push back a wall and will need more time or materials, they can quickly upload this request on the software. The information is available to everyone, so there are no miscommunications that lead to delays or overspending.
Software is also ideal for project cost management. Software is optimized for estimating project costs using benchmarks and earned value management. From cost estimations and quote management to forecasting and beyond, a good construction software solution can be your saving grace when it comes to managing the costs associated with your project.
Update Cost Plans
You should consistently analyze and reevaluate cost plans to determine if any alternations are needed. If costs are higher than aspected in one area of the construction process, you can balance it out by cutting costs in another area. Keep in mind that costs can be changed due to outside forces as well, such as inflation or a shortage of materials. These can cause prices to change, so a project that may have been within budget could easily go over budget. With construction management software, you can integrate it with your account program to provide stakeholders with real-time updates of productivity of labour and costs data, so smart decisions can be made.
Submit Cost Reports
Consistently provide costs reports to the client to keep them informed on the progress of the project. This also lets you check the cost report against the cost control plan to determine how financially healthy the project is.
Cost reports streamline communication between owners, contractors, and subcontractors. Real-time reports help to identity delays or budget overruns that may accur.