Hi,
I am trying to create a cost centre for my company here. I have a few question
a) i look at my company bill of quantities and it look scattered and i feel very hard to transfer the cost from my excel sheet prepared by my estimator to the programme. An example of the excel sheet as below. this is only 1 page and this project has 100 pages of excel sheets. sometime, the items in the programme are not the same and sometime, for example, the excavation item done by my estimator include the concrete cost as well. i am afraid i will make a mistake for sure in the end of the thing and i feel very difficult to input the bill of quantity cost to programme. anyone has the same problem? i feel its even impossible to ask my estimator to input all the cost to programme when they do the tendering work? is this an idea or it happen in reality? if yes, how can i do this please?
b) i look at the cost that i think i should divide to manpower, material, plant and subcontractor. should i put more? or just put a total cost which make my life easier? any planner to advise please?
c. the programme cost below show when the cost incur but not show the when exactly the my company pay. for example,
i. company pay the subcontractors on the 14th and 30th every month
ii. company pay the supplier on the 14th every month
iii. company pay the plant on the 14th every month
iiii. company pay the labour/manpower on the every wednesday which start count from friday 8 working day.
to be a planner, do i need to show the real cost or just put the incur cost happen on every task?
c. i feel confuse how should i use the programme to control the company cost, this is my question eventually, thanks.
Regards,
Mike
What you have here is a classic problem caused by the estimator breaking down the project into his idea of the components according to his way of classifying and categorising the project components, and your plan wanting it to be broken down another way, ie by tasks. It would have been better if the plan/program/schedule had been done first and the estimator had quantified and costed each task. But since that did not happen, you now have to make your tasks' costs match his estimate.
It won't be easy but at least you know that they must both add up to the same total, and at least the process will force you to review the whole estimate.
Mike,
if you want or need to manage project costs and cash flow then you shall create cost components (labour costs, machine costs, material costs, indirect costs, etc.) and assign them to project activities, resources, assignments. Use parametric estimates (cost of work unit) for typical activities to be sure that all estimates are based on the same initial data.
Don't mix costs and payments - input them as different cost components. I suggest to input estimated costs as an additional cost component. If the model will include both costs, estimates and payments total cost will not make sense. In Spider Project we create cost centers that include a group of cost components and it permits to manage parallel budgets, like internal (real) cost, estimated cost, payments, contract costs, etc. Having all of them you will be able to compare actual costs with estimates and payments, you will manage project cash flow.
The level of detail in your schedule will different for different time periods. It is the same for schedule and cost data.
Scheduling software does replace accounting but good cost estimates will permit to take informed decisions optimizing project costs.
Regards,
Vladimir
Apart from very small short term projects (3 to 6 months and under $200,000) attempting to directly integrate the cost estimating process with the scheduling process in fraught with difficulty. Even on these smaller projects, direct linking is not really feasible unless the primary source of all costs is staff directly employed on the work.
Most normal projects require a degree of integration between cost and schedule. This is usually achieved by developing a WBS and integrating time, cost, scope, risk and quality at either the Work Package level or the Control Account level.
The basis of cost estimating is quite different to task duration estimating, for more on this see:
http://www.mosaicprojects.com.au/WhitePapers/WP1051_Cost_Estimating.pdf &
http://www.mosaicprojects.com.au/WhitePapers/WP1052_Time_Estimating.pdf.
You also need to appreciate the difference between primary controls and secondary controls such as cost management, for more on this see: http://mosaicprojects.wordpress.com/2011/02/10/project-controls/