Practices for Effective Project Cost Management

Keeping project cost on track is one of the challenges that the Project manager faces. He has to ensure that enough hours are available to deliver good results.

I have read some tips which I am sharing with you all to make sure that your project cost stays reasonable.

Realistic estimate: Collect a genuine estimate after consulting with your team. Make sure it covers all the project’s phases, activities, people cost and materials costs.

Take Approval: Present this estimated budget to the sponsor and steering committee and get it signed off.  

Make monthly plan: Now determine the project monthly cost based on your knowledge of the project’s resource plan and schedule.

Ascertain cost controls: Define and set clear cost controls and sign-off responsibilities for the different types of expenditure. This is very important because here the actual costs that will be booked to your project.

Calculate metrics. Calculate and update your cost metrics at the end of each reporting period. Measure how much money the project has spent of the total budget compared to how much money you had expected it to spend at this point in time. Include your cost metrics into your project reports and steering committee presentations.

Revise forecasts. Adjust your forecasts on a monthly basis to tailor any change that have taken place.

Communicate. Create transparency to senior management around the project’s costs by including your cost metrics and key numbers into your project reports and steering committee presentations. If for some reason your costs are not on track, treat it as an urgent issue which must be analyzed, resolved and discussed with the steering committee [1].

Reference:

https://explore.easyprojects.net/blog/project-cost-management#agree

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