Last Updated on November 16, 2015 by Wentzil Olivier

Almost all projects need to be guided throughout to receive the required and expected output at the end of the project.

In addition to the project goals that the project manager has to oversee, the control of various costs is also an important task for any project. Project management would not be effective at all if a project manager fails in this respect, as it would determine whether your organization would make a profit or a loss.

Cost Control Techniques

Following are some of the valuable and essential techniques used for efficient project cost control and how Smart It can help with project management cost control:

1 – Planning the Project Budget
You would need to make a budget at the beginning of the planning session with regard to the project at hand. It is this budget that you would have to help you for all payments that need to be made and costs that you will incur during the project life cycle.

2 – Keeping a Track of Costs
Keeping track of all actual costs is also equally important as any other technique. All transactions in Smart It can be linked to a project. A project income / expense statement & project Trail balance report can be printed from Smart It to ensure the project is making profit.

3 – Effective Time Management
Another effective technique would be effective time management. Although this technique does apply to various management areas, it is very important with regard to project cost control.
The reason for this is that the cost of your project could keep rising if you are unable to meet the project deadlines; the longer the project is dragged on for, the higher the costs incurred which effectively means that the budget will be exceeded.

4 – Project Change Control
Project change control is yet another vital technique. Change control systems are essential to take into account any potential changes that could occur during the course of the project.
This is due to the fact that each change to the scope of the project will have an impact on the deadlines of the deliverables, so the changes may increase project cost by increasing the effort needed for the project.

5 – Use of Earned Value
In a nutshell, Earned Value is an approach where you monitor the project plan, actual work, and work-completed value to see if a project is on track. Earned Value shows how much of the budget and time should have been spent, with regard to the amount of work done so far.
This is particularly helpful for large projects and will help you make any quick changes that are absolutely essential for the success of the project.

Conclusion

Simply coming up with a project budget is not adequate during your project planning sessions. You and your team will have to keep a watchful eye on whether the costs remain close to the figures in the initial budget. You need to always keep in mind the risks that come with cost escalation and need to prevent this as best as you can. For this, use the above techniques explained and constantly monitor the project costs.

To find out more how you can use Smart It to manage your project costs, feel free to contact one of our consultants or follow this link: http://www.smart-it.co.za/help/projects.htm