Construction Project Management - How do you report on the cost of a job to date?

Enabliser Meg

When you’re in the middle of a building project, how do you work out costs to that point? For example, do you take in all of the supplier invoices that you have received to date and compare these with the job revenue billed to date?

If so, what about the supplier invoices that you haven’t received?  How you do factor in the change requests that you’ve generated?

And are you still trying to keep it all under control in an excel spreadsheet?

Estimates vs Actual Costs
Some people say they know exactly what a job is going to cost just by walking on site.  But how can anyone be sure what a retaining wall ends up costing unless they’re involved in every aspect of its construction (not exactly the most effective use of time for a project manager)

So how do you combine an estimate with actual costs + forecasted costs and be able to share it with colleagues without burying yourself in paper work?

Use a Project Management tool that allows Change Management
Project management tools that allow you to generate Change Management make life so much easier. Here’s why:

Change Request
Linked to a job ID, Change Requests allow you to generate a document requesting a variation that can be reported as a pending change to the estimate. It will give you an indication of how the estimate will change if the Change Request is approved.  Even if it isn’t approved, you’ll always have a record of the request.

Change Orders
If the variation is approved, you simply convert the Change Request to a Change Order. And if the approval is different than you requested, you simply update the scope and/or amounts.

Easily Share Information with your Colleagues
You can notify your colleagues that Change Management documents have been created. Or for more control, you can include an approval process for internal review of the variation, before it’s sent to an external contact.

All excellent tools, but what about those supplier invoices that you still haven’t received?

Cost to Complete
If you know that work has been completed, but the invoice won’t be received in time for your job reporting you can use the Cost to complete process to record the forecasted costs.

Basically, this is the cost accrual for the job over a given reporting period. Depending on your project management tool you can record it as a single value or break it down into workflow.

Avoid & Fix Budget Blowouts
Once the variations and forecast are recorded the job reporting is more accurate.  And with more accurate and regular reporting, the sooner budget blow outs can be remedied.

Other Valuable Project Management Software Tools
To help you manage your project more effectively and keep a control of costs, you should also look to things such as:

  • Multi reporting options – report on original, pending, approved and revised budgets.
  • Job Cost Analysis – report on up-to-date job margins.
  • Workflow – alert colleagues when Change Management documents are generated. 
  • Document integrity – documents are generated from companywide format.
  • Data integrity – data included in a backup.

So what’s the best construction project management software? It really comes down to the way you work and the scope of the project itself.
If you need some advice or would like to find out more about the different tools, the Enabling team are always here to help.

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