Containing costs and keeping them under control is one of the biggest challenges in a construction project. This is especially difficult when there are multiple contractors and sub-projects involved.
It is crucial to calculate ways to manage funds through effective cost management. Here are some top tips for managing costs under any circumstances.
Make upfront estimates accurately
Getting your project off to a good start is super important, and one way to do so is by estimating costs within a small margin of error. This will help set expectations properly before anything has even commenced. This may require a bit more time at the beginning of the project, as the project manager will have to make multiple bids in an efficient manner to establish cost baselines and calculate the average costs that will be used throughout the project.
Develop a realistic budget
Now that estimates have been clearly laid out and established, you are in a great position to establish an accurate budget for the project. This gives your team some room and leeway for order changes and other contingencies that may arise. Using an effective budget planning tool is critical in a construction project, as it provides the project manager and other members of the team with real-time updates on whether the project is on track and where you risk going over-budget.
Keep costs under control throughout the project
Another important step of keeping costs under control is making sure to keep a close eye on them throughout the entire project. An experienced project manager will do this by checking bills against estimates and quotes to ensure consistency. There are several cost challenges that can arise unexpectedly at any point of a project, such as unexpected delays, unforeseen hindrances to progress, or last-minute change orders. Allowing an extra buffer in the budget can make all the difference in handling such situations, otherwise, costs can unexpectedly start to pile up.
Report the status of the budget accurately & frequently
A good project manager will make sure to report on budgets and costs at every single meeting. This keeps the entire team informed about where the project might be over budget, under budget, or on track. This ensures that everyone is accountable for their participation. If any issues arise within the team between members, they should be discussed and resolved sooner rather than later.
Evaluate the project once completed
After a construction project is completed, it is a good idea for the project manager to analyse what worked well and what didn’t work so well. This will give an indication and insight not only for this project but for future projects as well. Having this knowledge will be particularly useful if you intend to commence another construction project with the same client, team, and project manager.
A successful construction project is considered one that is completed on time and within budget. If these two aspects are achieved then everyone in the team will complete the construction project with ease.
