A developer running a construction project receives a lot of paper: contractor valuations, consultant invoices, variations, supervision reports. What they don't always get is a simple answer to the question: where do we stand? Good cost control turns all that paper into one picture.
The four questions
At the end of every month, a developer should be able to answer four questions:
- What is the forecast final cost? Not just how much has been paid, but how much the project will cost in the end, for every trade and every line item.
- What has been committed and what has already been paid? Signed contracts against actual payments, for every contractor, supplier and consultant.
- Where is there an overrun, and what caused it? Whether it comes from the agreed price, from approved variations, from index linking, or from a trade not yet contracted.
- What are the cash needs, and when? A payment forecast for the coming months, according to each supplier's payment terms.
The foundation: a locked, approved budget
You can't measure an overrun without a point of comparison. So the first step is to lock an approved budget as the baseline, with a date. From then on, every budget change is recorded separately, and not "absorbed" into the numbers.
What a monthly report should contain
- A table by trade: budget, commitments, approved variations, paid, forecast at completion and variance.
- Clear flagging of overruns by severity, so they can be seen at a glance.
- An explanation for every overrun: what overran, by how much, why, and what decision is needed.
- A cash-flow forecast for three, six and twelve months.
- Contractor and supplier status: how much has been paid, how much remains and how much retention is held.
The common mistake: waiting for the final account
Many overruns are only discovered when the contractor submits the final account. But in most cases the signs were there earlier: a variation approved verbally, a line whose quantity grew, a trade not yet contracted and still estimated from an old budget. Ongoing control catches them while there is still time to decide.
FAQ
What is the difference between cost control and accounting?
Accounting records what happened. Cost control looks ahead: how much the project will cost in the end and what needs deciding now.
How often should there be a report?
A full report once a month, and an immediate alert when there is a significant overrun.
Does the developer need to install a system?
Not necessarily. Our service is built so that the developer sends documents and receives ready-made reports, without installing anything or entering data.
