Construction Budget Template
You may have heard the term "construction budget" tossed around before. However, there is more to it than meets the eye. When you're spending a significant amount of money on any construction project, you need to have an understanding of what is going into your construction budget. In order to understand how to create a successful construction budget, you first must be able to understand your financial obligations in a construction budget. You can do this by breaking down the project in four different areas - initiation, design, operation and maintenance.
You'll need to break down the construction budget into the four areas mentioned above. Once you've done so, you can then determine the cost implications of each area. The other important factor to consider when determining the scope of the project budget is the initiation phase. This is the period immediately following the decision to initiate the project.
Many construction estimates make assumptions about the scope of the work when they submit them to the client. Without good knowledge of what is required, these estimates are bound to be on the high side. In addition, most estimates fail to account for the possible scope changes that could occur during the course of the construction. If any scope changes are discovered after the budget has been established, the budget will be adjusted to reflect the adjustments.
There are a number of factors that impact the cost of any construction projects, but hidden costs are perhaps the most destructive. Some hidden costs can't be seen by the untrained eye such as hidden transportation costs, utility hook ups, roofing materials, landscaping and other unseen elements. The reality is, these are the types of things that eat up a big chunk of the budget. However, even if a contractor can anticipate all hidden costs, he's still responsible for them once the construction budget is established.
This brings us to another fact that is often overlooked during budgeting: The construction budget is really a sum of a lot of smaller expenses that need to be understood and accounted for. Once the budget is established, it needs to be audited periodically to ensure the project manager and his staff are using all resources available to maximize the return on investment. Even if the scope of the project is well known, there might be factors beyond the scope that will affect the construction budget. For example, unexpected weather delays may increase labor costs or shorten the expected time period of the project.
A construction budget template is a great way to track down these hidden costs so you don't have to spend hours doing your own research. These templates include the actual construction costs, hourly labor fees, material and supplies, taxes, insurance, and other miscellaneous expenses. Each month, you can plug in the costs and make your own determination of the actual cost of the project. If it turns out the actual construction budget is less than originally estimated, then the scope change is justified.
Another common problem with most construction projects is that unexpected events may occur that are well outside the scope of the original estimate. This is where a construction budget template comes into play. You can plug in the date, time, and cost and the construction budget template will provide an estimate of the overrun or extra funds needed to cover the unexpected costs. In some cases, the unforeseen costs may be too great to allow for a timely recovery and this is when a financial manager must step in and make a decision about the construction budget. Usually, a financial manager will make a recommendation to the project manager about the best course of action.
While it is important to plan for unexpected events, it is also imperative to carefully consider and minimize them as much as possible. This is where construction budget management software becomes truly beneficial and necessary. You can use a construction budget management software to track material costs, labor costs, material and supplies costs, and other aspects of your project management and planning. With the information you gain from this type of software, you can make quick and accurate estimates and better prepare yourself for any unforeseen expenses that might arise during the course of your construction project. In fact, such software makes it possible to virtually eliminate the need for human input, which makes any mistakes as a result nearly impossible.