Construction Management - Cost Control

As outlined earlier in our introductory article, construction is a capital intensive affair. There are large amounts of money going into an intricate network of recipients and in different stages of the process, making it of utmost importance the control of all these finances and eventually result into the most appropriate cost, the best value for the proprietor's money. Like in other businesses, construction cost control requires the following key accounting tools to make success and are specially focused in quantity surveyor courses in rawalpindi

• Budget training in quantity surveyor courses in rawalpindi: This refers to a projection of the total cost for the construction foreseen. A budget ensures that one has a clear understanding of the task at hand. It is meant to ensure that the proprietor is in a position to mobilize enough finances to fund the process from beginning to ending. A construction budget is done at different stages, from the time that an aspiring realtor approaches consultants with their aspirations to build a house or construct a resort or whatever construction dream they might have. Initially, it will be a vague estimate, usually based on experience, for example, a three bedroomed house costs so many thousand dollars. If the proprietor is able to mobilize this amount, then design is done. When complete, a quantity surveyor prepares a Bills of Quantities (BoQ), an itemized cost schedule, just like the purchase list you take to the store. On this is usually a contingency amount, a figure estimated to absorb any changes that may arise (a very probable happening).
• Purchase list: The BoQ is then subjected to tendering process, aimed at selecting the most appropriate store to buy from, in this case, what contractor to involve in the construction. Contractors compete and the best offer (In most cases the lowest) is selected. The cost of the winning tender becomes the construction contract sum and forms the cost benchmark for all monies to be paid for the construction of the facility in question.
• Receipt: Like in all purchases, a receipt depicts the actual cost of the items bought. Construction work is paid in the form of certificates (part payments based on either a time frame or stages of completion). These payments are actual costs of the process. In most cases, there is a deviation from the budget, and this gives the most reliable information on cost, both for the present and for the future.
• Revised budget training in quantity surveyor courses in rawalpindi: Once you are enlightened on the going rates at the store, you adjust your future budget. In the same way, in the course of construction, the costs estimated in the tender BoQ are adjusted to fit the circumstances. Incidental costs are also clearly depicted and as such, it is easier to project the final cost. This is called appraisal and is done periodically to update the financial landscape of the construction.
• Reporting: We are always answerable for what we do with money, whether ours or those of others. At the end of the month, you most probably look back and allocate all the money for the month to which use it went and net this off from whatever balance there might be. In the same way, when construction is complete, there is the obligation to account for all the finances input in construction and to answer the three accounting questions;
• What money was input
• Where did the money go
• How much remained

When this is done, it is in order to regard the process to have had good cost control. It is important to note that cost control is the responsibility of the proprietor; after all it is their money at stake. They appoint the right consultants, depending on the scope involved. This will range from a quantity surveyor for moderate projects to a cost consultant for large projects. Even with these consultants in place, the buck stops with the proprietor.