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Key question
“Will the budget hold?”
Strength
Commitments and forecast
Method
Plan vs. actual and EAC
from 0.1 FTE
Starting point, scalable with the project
Why the forecast matters
If you know the final cost early, you can still control it.
As soon as an order is placed, the budget is committed in economic terms – even if the invoice arrives months later.
That is exactly the task: we record open orders and commitments entered into – the commitments – from the moment they arise. Together with the actual costs incurred and the work still to be awarded, they form the basis for the forecast of final cost, the Estimate at Completion (EAC). This is the figure a project leadership uses to steer the actual cost development and respond early to deviations.
Swipe sideways to view →At the reporting date, part of the budget has been paid, another part ordered and thus committed (commitments), and the rest is still planned. Together they make up the forecast of final cost. If it lies above the approved budget, the deviation is visible early – while there is still time to take corrective action.
Cost control as a discipline of project control – from the structure to the report.
Budget tracking
Cost structure and cost breakdown exactly as estimated – plus ongoing plan-vs-actual tracking. When estimating and control follow the same structure, every deviation can be traced to its cause.
Obligo & commitments
We record open orders and commitments entered into from the moment they arise. That way the committed capital is visible long before the invoice arrives.
Forecast of final cost (EAC)
A reliable forecast of total cost at project completion, continuously updated, with trend analysis and scenarios for the cases that can realistically occur.
Variance analysis
Plan-vs-actual comparisons with the cause identified – the basis for corrective action that targets the right point.
Assessing changes and variations
For every change and every variation, we show the impact on budget and final cost. That keeps visible what a decision really costs.
Cost reporting
Cost reports for project leadership, steering committee and specialist departments, each suited to its audience – from one shared data basis, with deviations, their causes and the current forecast.
What you gain
What you gain
Budget certaintyYou know the realistic final cost, not just the actual position.
Early warningCost risks become visible while corrective action can still make a difference.
A basis for decisionsReliable figures for approvals, variations and contingencies.
Schedule and cost togetherIf a date shifts or a variation comes in, you see the impact on budget and final cost immediately.
ScalableFrom a single cost controller at 0.1 FTE up to a complete controls team.
Our approach
Four steps, in every reporting cycle
The forecast depends on regularity: only when it is recalculated in every cycle does it become a reliable management tool.
01
Set up
We take the cost structure from the estimate and align budget, cost breakdown and reporting rhythm with it. That way estimating and control follow the same logic, and plan and actual remain comparable at all times.
02
Track
Actual costs, open orders and commitments entered into are recorded continuously. The commitments are the most important figure: they show what is already committed but not yet paid.
03
Forecast
From actual costs, commitments, trend and outstanding work, we regularly project the final cost. The forecast shows the realistic position, even when it is uncomfortable – only then is it a reliable basis for the project leadership's decisions.
04
Report and correct
The forecast, with the causes of deviations and proposals for corrective action, goes first to the project leadership, then to the steering committee. For agreed measures, we follow up until their effect is visible in the cost forecast.
Context
When we take over cost control
Three situations – what they share is the question of what the project will cost in the end.
01For a single projectWe take over cost control of a capital project from the idea to financial close.02Extra support in critical phasesWhen individual project phases need more control than your own team can provide alongside its other work.03For entire programmesWhen several projects are to be made comparable and controlled according to the same logic.
Accounting records what has been invoiced – that is its job, and it does it precisely. Cost control looks ahead: it also tracks open orders and commitments, projects the final cost from them and reports variances while the course can still be corrected. Together, the two give the complete commercial picture.
What are commitments and why do they matter so much?
Commitments are the capital that is already tied up even though no invoice has arrived yet: purchase orders placed, services contracted and obligations entered into. For equipment with long lead times, many months often pass between order and invoice. If you record commitments, you know the real cost position at the time of ordering – not only at the time of payment. Services not yet contracted are not included; they go into the forecast of final cost as planned costs.
What does EAC mean?
Estimate at Completion – the forecast of total cost at the end of the project. It is recalculated in every reporting cycle from actual costs, commitments, trends and the work still outstanding. This shows a variance early, while there is still time to take corrective action. The actuals show what has been spent so far; the EAC shows what total cost to expect at the end.
Do you work in our systems?
Yes. We work in your systems or bring proven templates if there is no structure in place yet. What matters is not the tool anyway, but the discipline of a regular, honest forecast.
From what size is cost control worthwhile?
From as little as 0.1 FTE – so also for projects where a dedicated full-time position would not pay off. We work out the actual scope together, based on your project. Through Project Controls on demand, it can be arranged flexibly and adjusted to your needs at any time.
What does cost control cost?
We charge by the hour, by day rates or at a fixed price – we work out together which model fits. The effort depends on the size of the project, the reporting frequency and the number of contract packages. For a first indication, the project volume and duration are enough for us. The initial call is free of charge.
Terms such as Cost Control and Earned Value are explained in our glossary – along with 57 other terms from the turnaround and project business.
From the blog
From the field.
Further reading: an article by our specialists on this topic.
Project Controls · Mario Leonhardsberger
Project control from 0.1 FTE: when Project Controls on demand is enough and when it is not
Many smaller projects run without cost and schedule control because a full post per discipline is not worth it. It also works at a smaller scale: from 0.1 FTE.
Can you say what your project will cost in the end?
Get in touch – we will tell you what your cost tracking delivers today and what is missing for a reliable forecast. The initial call is free of charge.