What is the purpose of cost control?

Answer 1

Controlling cost means monitoring and controlling updates and changes to costs, budget, and the cost baseline of the project. Monitoring and controlling costs has two dimensions to it: expenditure of project funds and the work performed as a result of those expenditures. One major aspect of cost monitoring and controlling is to determine the relationship between the expenditures and the accomplishments. The cost performance depends on this relationship. The other main aspect is to control the changes to the approved cost performance baseline.

To be more specific, monitoring and controlling the project cost includes the following tasks:

• Influence the factors that can create changes to the approved cost baseline.

• Monitor the following:

o Work performed against the funds expended

o Variance of cost performance from the approved baseline• Prevent unapproved changes from creeping into cost reports and expenditures.

• Act to keep cost overruns within the planned acceptable limits.

• Ensure the following:

o Change requests are dealt with in a timely fashion and managed as they occur.

o Expenditures do not exceed the approved budget by period or by total amount. Any change to the budget must be approved before implementation.• Communicate with the appropriate stakeholders about the cost associated with the approved changes.