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Project Cost Management Checklist


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Project cost management is important part of project management that includes discussions and techniques for estimating and planning cost of the project, budgeting, analyzing, controlling variances, and managing cost overruns. This checklist generally shows steps to estimate the cost, make up budget and properly allocate funding throughout project implementation.

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1. Estimating project costs

  • Defining activities the project cost is to be applied to
  • Defining cost types and grouping costs
  • Comparing potential project costs with other competing projects for approval
  • Comparing costs with tangible profits associated with project completion
  • Applying consistent methodology to identify cost risks
  • Defining financial circumstances required to accomplish the project
  • Preparing estimates for equipment, labor, and financial costs to be incurred by the project
  • Validating cost estimates by analogy and using historical data
  • Joining project costs with Chart of Accounts
  • Documenting cost estimating assumptions

2. Cost budgeting

  • Allocating project costs by elements of work breakdown structure (WBS)
  • Committing cost account managers to costs
  • Allocating project costs to time phases (months or years)
  • Stating time phased budget baseline at the cost account level
  • Preparing project level spending plans
  • Allocating budget by levels within the project
  • Approving project level spending plan
  • Tracking personnel usage against plan to calculate project spending
  • Establishing the budget for cost tracking and control

3. Costs control and monitoring

  • Documenting procedures for cost controlling and monitoring
  • Introducing earned value implementation guide criteria to determine cost adequacy
  • Adapting accounting policy to get reliable and timely information
  • Maintaining traceable planning baselines to assist cost and schedule tracking
  • Collecting earned value and actual spending data
  • Reporting schedule and cost variance and performance ...

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