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Q. How do I best control cost?
Several people think that they are controlling cost when they approve invoices or sign cheques. In fact the cost is already long since committed at this stage whether payment is made or not. Cost should be controlled at the planning stage. It costs small to make changes to the plans at this stage but the impact on the final cost can be quite significant. So it is essential to establish realistic cost estimating for every component of the project before it is committed to implementation.
It must as well be realized that project costs that are already committed or expended are sunk costs and cannot be controlled further. Only future uncommitted costs are able to be affected and therefore controlled. As a result the primary focus of all project management cost reports should be on estimates of future costs and hence on the total cost-to-complete of each component of the work.
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