5 Tips for Construction Budget Management

Construction budget management is essential to the accurate execution of a project. A successful project amalgamates quality, time, and proper budgeting. The construction project budget helps construction managers to plan, coordinate, and execute activities while keeping in mind the cost limitations. This article will discuss five key tips that can help keep your construction budget on track.

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Use a construction project management software:

A construction project management software can help streamline budget management by offering a variety of automated features that help keep things on track. For example, project managers can access a high-level overview of project costs and detailed costs for the cost codes with construction project management software. Furthermore, such software also helps project managers clone existing estimations to monitor the construction project budget. Additionally, with automated cost updates, proposal generations, and project lifecycle tracking, construction project management software helps keep projects within the decided budgets.

In addition to this, construction management software can help project managers improve, automate, and stay on top of communication, bidding, cost estimations, vendor management, labor activities, etc.

Establishing construction project budgets for every project phase:

Another efficient way of construction budget management is to develop mini budgets for each project phase. This helps project managers regularly track their financial performance by piecing the total construction budget into smaller intervals. The manager can then track all expenses and costs against these mini budgets and catch overruns earlier. By doing so, the manager can ensure that any cost overruns are made up for throughout the project or adjusted in the overall budget.

Look out for scope creep and keeping communication streamlined:

Now that you have divided your construction project budget into phases, the next thing you need to do is manage it. Scope creep is a common construction problem and refers to alterations in the scope of a project. While changes to a construction project are common, unidentified changes to the scope can often create much trouble for project managers. The ideal way to address this problem is by using your construction project management software to communicate with your team about any changes. This helps adjust the budget and keep the project moving forward by keeping everyone on the same page about the changes.

Managing staff time to find budget spills:

A construction project team is the most valuable asset to the project itself. It is almost impossible to know how successful or profitable a project would be without tracking how the staff's time is allocated. Again, using construction project management software can help you break down information, track employee timesheets, and track construction budgets at every project phase. By monitoring time entries, project managers can opt for more resource utilization which, as a result, helps projects stay within the targeted budget. More often than not, companies find that areas that they thought were profitable are not. This clarity allows them to target areas causing budget overruns and thus help cut costs.

Analyze your project after it is over:

Learning from your past projects is ideal for streamlining construction budget management. By analyzing your company's progress and establishing where you went right or wrong with the construction project budget, you can isolate areas of improvement and ensure that your upcoming projects stay on budget. A project analysis will give the project manager more insight into how their construction project management software has helped them stay on budget. It will also allow them to understand how the construction budget can be improved and what resources need to be cut down, increased, or optimized for successful project delivery.

If you want to know more about a construction management software that can help streamline construction budget management, try BOLDBuild. BOLDBuild is a product of AlphaBOLD and is a solution designed specifically for the AEC sphere.

Conclusion:

A construction budget defines the amount of money you are going to spend throughout your project and, as a result, has a big impact on your overall profits. This is precisely why A.E.C. professionals spend a great deal of time managing bids, cost estimates, material costs, change orders, etc., to create an accurate budget. While changes in the budget are inevitable, the tips shared in this article will help project managers and owners streamline construction budgets to achieve more profitability.

Jessica Tanner

Update 13 February 2022