7 Tips For Better Cost Control & Expense Control

7 Tips For Better Cost Control & Expense Control

Cost control is the process of estimating costs in order to plan and adjust a budget. It involves monitoring expenses and identifying risks in order to increase profits. Project cost control begins with monitoring and tracking changes to expenses, which can be either "favorable" or "unfavorable." Expense control involves making direct changes to spending, which are informed by cost control data. To track and control expenses, they must be identified and sorted into one of two categories: direct expenses and indirect expenses. Direct expenses go directly to a project's tangible needs, such as materials, labor and equipment.

Indirect expenses are costs that are constantly accumulating in the background, such as employee salaries, employee benefits and office/facility rental. Seven tips for better cost control include defining important KPIs, anticipating inflation, creating contingency plans, and preparing for risks and variances. Our free estimate template can help predict and manage direct expenses.