Matching concept
The basic and most important Construction tool used to determine Project Profitability is the Cost Reporting process. This guideline will explain the concept of Cost Reporting, understanding the template and the associated software packages. Most software packages today are unable to provide a true cost vs value comparison and thus the need to have a customised Excel template to make the necessary adjustments is extremely important. Most major Contractors today apply this approach.
When we look at this concept the most important part of a cost report is the “Cost versus Allowable Report”. The report is designed around the interface between the Allowable grouped into Group Codes (Value) vs the Costs according to cost code allocations applied in the Accounts costing system. This template should be divided into two main sections, namely, VALUE and COST, which enables the Quantity Surveyor to show the measured value to date (allowables) broken down into the respective cost codes for labour and materials, for comparison with the actual costs to date. There should also be columns that reflect the monthly variances in allowable (Cost vs Value Reconciliation). The document should indicate the total tender allowable for the Contract and the current budget forecast of gains and losses on the 'Forecast Allowable sheet'. For a copy of our free monthly cost reporting concept guideline, click on the link below...
| cost_report_concept.pdf |
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