Use of Cost Control

Amount of detail and the time interval between cost control reports must be considered, which is different according to the level of management for which they prepared. For a site manager, it is necessary to receive the cost report on weekly basis.

After preparing the reports based on the cost data collected, it is important to project the cost in to future and to estimate or re-estimate the cost of the work yet to be completed. Any new information must take in to account since the commencement of the contract. Thus, a suitable reporting system is important part of a cost control system. The estimator would become more reluctant in the future to use cost data that have been fed back from the site if an adequate reporting system is used. In addition, the estimator can save same time to determine sufficient detail about the data and conditions they acquired.

There are two areas within to check whether the cost control reporting system is efficient or not. First, is to check on the profitability of the work. The value of the work that will be returned is compare with the cost of the work that was carried out. This is a straightforward comparison between the valuation figure and the total expenditure to check on profit or loss if no detailed cost control is used.

The second would be check on efficiency, carried out against the standard of the output rates that were used by the estimator in compiling the estimate. Efficiency is concern with the site management and supervisory staff, whereas the profitability is concern with the contract management level and above.