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Cost Control
Cost Controls are essential in delivering a project in a cost-efficient manner and being able to forecast projected cost at project completion.
We apply the fundamentals of project management in our cost controls by creating a baseline budget. The budget is derived from the project cost estimate and as such is the baseline for tracking cost deviations and variances as the project progresses.
We strive to provide visibility of the budgeted costs and how the estimates / budgets were determined at the initiation phase.
Barrios Planning and Scheduling LLC has the answers for your cost control needs.

Our cost control system:
Our cost control system deliverables are produced in Excel, Access or the simplest software that can perform well in the Cost Management. The process implemented to retrieve the cost data will be imported from the accounting system to the cost control system, and we will customize reports that will be generated in the cost control system. Our cost control system provides detailed, accurate, transparent cost reports that match the accounting system dollar for dollar. Our system provides custom fields that will suit the data you want to track for project control's analysis. We are ready and have the experience to tackle any accounting and cost control problem.

Our primary focus is to keep our cost control systems as an extension of your company's accounting system to perform cost control activities. They do not require separate data entry from the accounting system. Our cost control systems will also never deviate from the accounting system, they will match each transaction dollar for dollar.

Cost Controls
Three important questions one must ask when initiating a project…

  1. Does the project have an adequate budget?
  2. Will the project come in on time and on budget?
  3. If not, who is going to pay for the extra costs incurred?

Barrios Planning and Scheduling consultants will be using the following practices to develop your cost control system that will align with industry standard and practices:

Design-To-Cost (Dtc) – Cost Evaluation And Estimate Of Probable Cost

  • As the design documents evolve, we will compare variances to previous estimates and prepare reasoning for the cost variances and possible path forward to mitigate cost risk for the project.
  • We prepare Estimates of Probable Costs with the applicable markups such as conceptual costs, contingencies, and price escalation.

Earned Value Management and Change Controls

  • We will track Earned Value to see if the project is staying true to the budget and planned burn rate.
  • Project controls become even more important when changes occur as a result of unforeseen conditions, scope change etc. Any time there are unforeseen expenditures, we will document the cause of the changes and who is responsible for the extra costs.
  • With this on-going measurement of the cost and completion schedule, we can advise the management team of any potential issues completing the project on time and / or within budget.

Trending and forecast Variances are important

  • With monitoring of expenditures against the budget elements, we not only monitor actual costs to date, but build a comprehensive trending system that identifies and tracks all current and potential issues that can impact cost and / or schedule.
  • Then, in combination with the trending system, we are able to manage changes, forecast cost variances and determine the estimated cost at completion.

Probabilistic Forecasting

  • Probabilistic or risk based forecasting utilizes the Monte Carlo simulation methodology to determine the probabilistic outcome of the estimated cost at completion. This method typically provides a significant added value in providing accuracy, visibility and credibility to the cost controls process.

Accurate Forecasting

  • Accurate Forecasting includes identifying trends early and spotting problems before they occur. Most failed projects fail before they even start, or to put it a different way, the root causes of most failed projects are in place before projects begin. Effective project controls includes analyzing the project plan (contract, budget, and schedule) and presenting an opinion as to the probable success of the project before project initiation. As much as 90% of negative impacts to a project are identifiable before they occur.

Revenue and Cost by Service Date

  • To measure and analyze performance, you have to compare revenue and cost for exactly the same task, for exactly the same period. Measuring revenue is relatively easy - what is the value of the work performed for the task for the period (consists of billed and unbilled (accrued) revenue).
  • Measuring cost for a specific task and time period can be much more difficult. If you are using your company's accounting system to obtain cost data, you could face the following problems: Labor charges hit the system in the month that they were incurred. Subcontractors and equipment can be billed monthly and hit the accounting system the month after these charges were incurred. If your accounting system does not date stamp the transactions by G/L Date, Date Entered and Service Date (which could all be different for a single transaction) you could have a serious problem trying to match revenue to cost for a specific time period. Project management (especially Earned Value) becomes impossible.

Project Accruals

  • Project accruals are very important for forecasting and tracking actual cost. We develop a cost tracking spreadsheet that track all costs and revenue not previously recognized in the system. This is the only way to measure and analyze project performance for recently completed periods. We will also provide KPI to measure the level of project accruals affecting forecasting each month.

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