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Construction Project Cost Management (Chapter 6 of First Construction Management)
A mind map of construction project cost management (Chapter 6 of First Construction Management). I hope this mind map will be helpful to you.
Edited at 2023-06-05 14:28:37- bacteria
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Construction Project Cost Management (Chapter 6 of First Construction Management)
- bacteria
This is a mind map about bacteria, and its main contents include: overview, morphology, types, structure, reproduction, distribution, application, and expansion. The summary is comprehensive and meticulous, suitable as review materials.
- Plant asexual reproduction
This is a mind map about plant asexual reproduction, and its main contents include: concept, spore reproduction, vegetative reproduction, tissue culture, and buds. The summary is comprehensive and meticulous, suitable as review materials.
- Reproductive development of animals
This is a mind map about the reproductive development of animals, and its main contents include: insects, frogs, birds, sexual reproduction, and asexual reproduction. The summary is comprehensive and meticulous, suitable as review materials.
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Construction project cost management
cost management tasks
1. Construction cost management tasks and procedures
Construction cost: the total of all production costs incurred during the construction process, consisting of direct costs and indirect costs
Direct costs: expenses that constitute an entity or contribute to the formation of an entity, including labor costs, material costs, and construction machinery and tool usage costs
Indirect costs: All expenses incurred in preparing for construction, organizing and managing construction production. Expenses that are not directly used and cannot be directly included in the project object, but must be incurred, including management personnel salaries, office expenses, and travel and transportation expenses.
Cost management is to take corresponding management measures to control the actual cost within the planned range and seek maximum cost savings on the premise of ensuring the construction schedule and quality.
Cost management must first do a good job in basic work. The establishment of a cost management responsibility system is the most fundamental and important basic work.
Basic conditions for cost management
1. Unify the content and format of the organization's internal engineering project cost plan
2. Establish enterprise quota
3. Establish a collection network and inquiry outlets for market price information on production materials, predict market conditions, and ensure timely and accurate prices.
4. Establish, organize, store and use the cost data and report forms of completed projects
5. Scientifically design the construction cost accounting account book system, business ledgers, and cost reporting statements to provide a unified paradigm for business operations of construction cost management.
Construction cost management tasks
1. cost planning
1. Prepare a written plan in monetary form on the production expenses, cost levels, cost reduction rates of the construction project during the planning period, as well as the main measures and plans taken to reduce costs.
2. It is the basis for establishing a construction project cost management responsibility system and carrying out cost control and accounting. It is a guiding document for cost reduction and the basis for setting target costs.
3. Project cost plans are generally prepared by the construction unit
4. Compilation principles
1. Start from the actual situation
2. Combine with other plans
3. Adopt advanced technology and economic quotas
4. Unified leadership, hierarchical management
5. Moderately elastic
2. Cost Control
1. Time: The entire process from the bidding stage to the return of the deposit
2. Category: before-event control, during-event control, and after-event control
3. cost accounting
1. Accounting object: unit project
2. Two basic links: collection and distribution; calculation of total cost and unit cost
3. The project management agency conducts project cost accounting according to the prescribed accounting cycle.
4. On-site cost accounting: Project management agencies assess project management performance Complete cost accounting: Corporate finance department assesses corporate operating efficiency
4. cost analysis
1. Cost analysis is based on cost accounting, analyzing the cost formation process and the factors that affect the cost, and seeking ways to further reduce costs.
2. In the process of cost formation, construction project cost accounting data are mainly used to compare with target costs, budget costs and actual costs of similar projects.
3. Analysis is the key, correction is the core
5. cost assessment
All aspects of cost management are interrelated and interact with each other
Forecasting is the prerequisite for decision-making
Plan is the concrete realization of the goals determined by decision-making
Control is the control and supervision of the implementation of plans
Accounting is the final test of whether the plan has been realized
Assessment is an important means to ensure the realization of target accountability and to achieve decision-making goals.
cost management process
1. Grasp price information of production factors
2. Determine project contract price
3. Prepare cost plans and determine cost implementation targets
4. carry out cost control
5. cost analysis
6. cost assessment
7. Prepare project cost report
8. Project cost management data archiving
2. cost management measures
1. Organizational measures: Prepare cost work plans, procurement plans, organizational theory-related measures, personnel scheduling, clarify responsibilities, powers, etc., strengthen construction quota management and construction task order management, and control the consumption of living labor and materialized labor.
2. Technical measures: Conduct technical and economic analysis, select methods, processes, plans, change machinery, change materials, reduce material inventory costs and transportation costs
3. Economic measures: Prepare fund use plan; determine and decompose construction cost management objectives; conduct risk analysis on construction cost management objectives and formulate preventive countermeasures; implement visa
4. Contractual Measures: Contract Structure, Claims in Contracts
cost planning
Type of cost plan
1. competitive cost plan
1. Stages involved: Construction project bidding and contract signing stage
2. Basis: Contract conditions, instructions to bidders, technical regulations, design drawings, bill of quantities
3. estimated cost plan
2. guided cost plan
1. Stages involved: Project manager selection stage
2. Basis: contract price
3. Budget cost planning to determine responsible cost targets
3. implementation cost plan
1. Stages involved: Project construction preparation stage
2. Basis: construction plan, construction quota, construction budget
3. implementation cost plan
4. The comparison between the two calculations (construction budget and construction drawing budget) is divided into physical comparison method and amount comparison method.
5. Construction budget is the basis for construction enterprises to organize production, prepare construction plans, prepare on-site materials, issue task orders, assess performance, and conduct economic accounting.
6. Construction drawing budget is the main basis for bidding quotations
Cost plan preparation basis
1. contract
2. Project management implementation planning
3. Related design documents
4. price information
5. Relevant quota
6. Similar project cost information
Compliance, regulation, calculation, price, determination, cost
cost planning process
The project management agency should prepare project cost plans according to cost components, project structure and project implementation stages through systematic cost planning.
The preparation of construction cost plan is based on cost forecast, and the key is to determine the target cost
The preparation of cost plan should meet the following requirements
1. Prepared by the project management agency
2. The project cost plan is instructive for the cost control of the project
3. Each cost item indicator and cost reduction indicator are clear
Project cost planning preparation should comply with the following procedures
1. Forecast project costs
2. Determine the overall project cost target
3. Prepare overall project cost plan
4. The project management agency and the functional departments of the organization determine their own cost targets based on the cost scope of responsibility, and prepare corresponding cost plans.
5. Develop appropriate control measures for cost planning
6. The corresponding cost plans shall be reviewed and approved by the project management agency and the functional department heads of the organization respectively.
How to prepare cost plan
1. Prepared according to cost components: labor cost, material cost, construction machinery usage fee, enterprise management fee
2. Prepared according to project structure
1. Project composition: single project, unit project, division project, sub-project
2. Consider the total reserve costs in the overall aspect, and arrange unforeseen costs in the main sub-projects
3. Prepared according to project implementation stage
One is a monthly cost plan prepared on a time scale network diagram - a histogram
Time-cost accumulation curve (represented by an S-shaped curve); the banana chart is a graph composed of curves in which all work starts at the earliest start time and all work starts at the latest required start time. All work starts at the earliest start time: it is good for ensuring the project is completed on time, but not good for saving money and loan interest. All work starts at the latest start time: good for saving money and loan interest; bad for completing the project on schedule
Time cost accumulation curve steps
1. Determine project schedule
2. Prepare cost expenditure plan based on time
3. Calculate cumulative expenditure costs
4. Draw an S-curve
Cost Control
Basis and procedures for cost control
1. Basis for cost control total, calculate, report, change, fund
1. contract
2. cost planning
3. progress report
4. Engineering changes and claims information
5. Market information from various sources
Advance, Cheng, He, Gong, Capital
2. cost control procedures
1. Management Behavior Control Program (Basic)
Establish review organization and procedures for cost management system
Establish review organization and procedures for the operation of cost management system
Target assessment, regular inspection
Develop countermeasures to correct deviations
2. Indicator control procedures (key points)
1. Determine hierarchical goals for cost management
2. Collect cost data and monitor the cost formation process
3. Find deviations and analyze reasons
4. Develop countermeasures to correct deviations
5. Adjust and improve cost management methods
3. Management behavior control procedures and indicator control procedures are independent of each other, but are also interrelated and restrictive. Cost indicators are used to assess management behavior.
Construction cost control methods
1. process control methods
1. Control of labor costs: separation of quantity and price Control means: Strengthen labor quota management, improve labor productivity, and reduce project man-days consumption
2. Control of material costs: separation of quantity and price means of control
1. Quota control: quota collection system
Subprojects—Construction Team
Engineering Department—Construction Professional Team
Unit project - project management department or subcontracting unit
2. Indicator control: Implement plan management and indicator control for materials without consumption quota, and formulate material use indicators.
3. lump sum control: sporadic materials
4. Measurement control: accurate measurement
3. Control of machinery usage fees: determined by the number of shifts and the unit price of each shift
4. Control of subcontracting fees: inquiry of subcontracting fees, establishing equal and mutually beneficial subcontracting contracts, establishing a subcontracting relationship network, strengthening construction acceptance, and subcontracting settlement
2. earned value method
1. Three basic parameter calculation formulas
1. Budgeted cost of work completed (BCWP) = completed work quantity
2. Planned work budget cost (BCWS) = planned workload x budgeted unit price
3. Actual Cost of Work Completed (ACWP) = Work Completed X Actual Unit Price
2. Four evaluation indicators of earned value method
Cost deviation (CV) absolute deviation: CV=BCWP-ACWP; CV<0 means overspending; CV>0 means savings
Progress deviation (SV) absolute deviation: SV=BCWP-BCWS; SV<0 indicates progress delay; SV>0 indicates progress advance
Relative deviation of cost performance index (CPI): CPI=BCWP/ACWP; CPI<1 means overspending; CPI>1 means savings
Relative deviation of schedule performance index (SPI): SPI=BCWP/BCWS; SPI<1 means schedule delay; SPI>1 means schedule is ahead of schedule
The cost (schedule) deviation reflects the absolute deviation, and is only applicable to the same project for deviation analysis. The cost (schedule) performance index reflects the relative deviation and is not subject to project constraints and implementation time constraints.
The earned value method can overcome the shortcomings of separate control of progress and costs in the past, and can quantitatively judge the execution effects of progress and costs.
3. How to express deviation analysis
1. Bar chart method: The image is intuitive and clear at a glance, but the amount of information reflected is small. It is applied to higher management levels. Express the absolute deviation of costs and visually indicate the seriousness of the deviation
2. Table method: flexible, highly applicable, large amount of information, can be used with the help of computers, most commonly used
3. Curve method: The three curves of the actual cost of completed work, the budgeted cost of planned work, and the budgeted cost of completed work are very close to each other and rise steadily, indicating that the project is progressing according to the predetermined plan goals, and is used for qualitative analysis
cost accounting
1. Principles, basis, scope and procedures of cost accounting
1. cost accounting principles
Cost accounting should adhere to the principle of synchronization of image progress, output value statistics, and actual cost collection, that is, the value ranges of the three should be consistent. The engineering quantity used to express the visual progress, the engineering quantity used to calculate the construction output value, and the engineering quantity based on the actual cost collection should all be the same value.
2. Scope of cost accounting
Scope of cost accounting: Project costs include direct costs and indirect costs incurred from the signing of the construction contract until the completion of the contract and related to the execution of the contract.
Costs can be divided into: direct labor, direct materials, machinery usage fees, other direct costs, indirect costs, and subcontracting costs
Direct costs refer to various expenses incurred to complete the contract and can be directly included in the contract cost accounting objects. Direct costs include: manpower, machinery and other direct costs. Indirect costs are incurred by the construction units of the enterprise to organize and manage the construction of the project. cost of
Other direct costs: material handling, loading and unloading and storage, fuel and power, amortization of temporary facilities, production tools and equipment usage fees, inspection and test fees, positioning and retesting, site cleaning, bidding fees, and travel expenses for entering into the contract during the construction process.
The project management agency should conduct project cost accounting according to the prescribed accounting cycle
3. cost accounting process
1. Review the expenses incurred to determine the expenses that should be included in the project cost and the amounts included in various period expenses.
2. Distinguish various expenses that should be included in the project cost into those that should be included in the project cost of this month and those that should be borne by the project cost in other months.
3. Allocate and aggregate the monthly production expenses that should be included in the project cost among various cost objects, and calculate the cost of each project
4. Conduct inventory of unfinished projects to determine the actual cost of completed projects in the current period
5. Transfer the cost of the completed project to the project settlement cost; calculate the actual cost of the completed project
2. cost accounting methods
1. tabular accounting method
1. Application conditions: Responsibility accounting for the cost of each position within the construction. Cost accounting for each link within the project.
2. Advantages: easy to understand, easy to operate, good applicability
3. Disadvantages: It is difficult to implement a more scientific and rigorous review system, the accuracy is not high, and the coverage is small.
2. Accounting Law
1. Application conditions: Completed on the basis of comprehensive accounting, accounting for project costs
2. Advantages: scientific and rigorous, less human control factors, and larger accounting coverage
3. Disadvantages: High professional level and work experience requirements for accounting staff
cost analysis
Basis for cost analysis
1. project cost planning
2. Project cost accounting information
3. Project accounting
4. statistical accounting
5. Business accounting information
mostly according
1. Accounting: mainly value accounting. It has the characteristics of continuity, systematicness and comprehensiveness.
2. Business accounting: It has a wide scope and can account for economic activities that have occurred, have not yet occurred, and are occurring, with the purpose of quickly obtaining information.
3. Statistical accounting: The scale is not only calculated in monetary form, but also in the form of physical quantity and labor quantity, and can provide absolute numbers, relative numbers, and average indicators. Purpose: predict development trends
Cost analysis content
1. Time node cost analysis
2. Work task breakdown unit cost analysis
3. Organizational unit cost analysis
4. Single indicator cost analysis
5. Comprehensive project cost analysis
Cost Analysis Steps
1. Choosing a Cost Analysis Method
2. Gather cost information
3. Perform cost data processing
4. Analyze the causes of cost formation
5. Determine cost consequences
Basic methods of cost analysis
1. comparative method
Compare technical and economic indicators, check the completion of goals, analyze the reasons for differences, and then explore ways to reduce costs.
Comparing Actual Metrics to Target Metrics: Positive and Negative Factors Affecting Goal Achievement
Comparison of the actual indicators of this period and the actual indicators of the previous period: reflecting the improvement of construction management level
Compare with the average and advanced level of the industry: find the gap
2. Factor analysis method: analysis order: physical quantity first, then value quantity, absolute value first, then relative value
3. Difference calculation method: a simplified form of factor analysis method, which uses the difference between the target value and the actual value of each factor to calculate its impact on costs.
4. ratio method
1. Relevant ratio method: examining the quality of operating results
2. Composition ratio method: Examine the composition of the total cost and the proportion of each cost item in the total cost
3. Dynamic ratio method: Analyze the development direction and speed of the project indicators. Two methods, base period index and chain index, are usually used.
Comprehensive cost analysis method
1. Project cost analysis by parts (Basic of construction project cost analysis)
1. Analysis object: Completed sub-projects
2. Analysis method: Compare budgeted costs, target costs, and actual costs. Analyze the causes of deviations and seek ways to save them
3. Three calculation sources
1. The budgeted cost comes from the bid quotation cost
2. Target costs are derived from the construction budget
3. The actual cost comes from the actual engineering quantity of the task order, the actual labor consumption and the actual consumption of materials in the quota picking list.
4. Applicable situations: For major sub-projects, cost analysis must be conducted from start to completion.
2. Monthly (quarterly) cost analysis
1. Actual versus budgeted costs: Analyzing cost reduction levels
2. Comparison of actual costs and target costs: analyze the implementation of target costs
3. Cost analysis of each cost item: Analyze cost composition proportions and weak links in management. To meet the stipulated policy losses, we should start by controlling expenditures and reducing overexpenditures to a minimum.
4. Analysis of the effectiveness of technical organizational measures: looking for ways to save money
3. annual cost analysis
1. Enterprise costs are settled once a year, and costs of this year are not allowed to be transferred to the next year.
2. Basis: Annual cost statement
3. Focus: Develop practical cost management measures based on the construction progress of the next year to ensure the achievement of goals
4. Comprehensive analysis of completion costs
1. Analysis object: unit project, comprehensively understand the cost structure of unit project and sources of cost reduction
2. Analyze content
1. Completion Cost Analysis
2. Comparative analysis of major resource festivals
3. Analysis of main technical saving measures and economic effects
Special Cost Analysis Method (win, labor, salary)
1. Cost profit and loss abnormal analysis
1. Whether the output value is synchronized with the actual project quantity and visual progress of the construction task order
2. Whether the resource consumption is synchronized with the actual labor consumption of the task order, the actual consumption of materials in the quota pick list, the turnover materials and construction machinery rented in the current period
3. Are the output value statistics of other expenses synchronized with actual payments?
4. Are budget costs and output value statistics synchronized?
5. Are actual costs and resource consumption synchronized?
2. Construction period cost analysis: Generally, the comparison method is used, that is, the planned construction period is compared with the actual construction period, and then the factor analysis method is used to analyze the impact of changes in each factor on the construction period cost difference.
3. Capital cost analysis: The cost expenditure rate indicator is usually used for cost analysis, that is, the proportion of cost expenditures to project revenue. Cost expenditure rate = actual cost expenditure during the calculation period/actual project revenue during the calculation period X100%
Cost project analysis methods
1. Labor cost analysis
1. Labor and labor costs adjusted due to increase or decrease in physical project volume
2. Day labor wages other than fixed labor
3. Reward fees for teams and individuals who have contributed to progress, quality, cost, etc.
2. Material cost analysis
1. Analysis of the cost of main materials and structural parts
2. Analysis of turnover materials usage fee
3. Purchase and storage fee analysis
4. Material reserve fund analysis: calculated based on average daily usage, material unit price, and reserve days
3. Machinery usage fee analysis
1. Contract based on output and calculate fees based on completed output
2. Calculate machinery costs based on time shifts
4. Management fee analysis: should be carried out by comparing the budgeted number with the actual number
cost assessment
1. Cost assessment is to measure the actual results of cost reduction, and it is also a summary and evaluation of the completion of cost indicators.
2. The basis for cost assessment: data on cost planning, cost control, cost accounting and cost analysis. The main basis for cost assessment is various indicators determined by the cost plan.
3. Three types of indicators for cost planning
1. Quantity indicator (numeric value) of the cost plan
2. Quality indicator of cost plan (reduction rate) (ratio)
3. Benefit indicator (reduction amount) of cost plan (difference)
4. Cost assessment method: The company should use project cost reduction amount and project cost reduction rate as the main indicators for cost assessment of the project management organization. Cost assessment can also assess company levels and project management organizations separately.