Bidkon

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Precision builds dreams. From blueprint to reality, Bidkon ensures every detail counts.

From cost consulting to quantity surveying, Bidkon construction consultants provide end-to-end project management solutions. Discover how we can help?

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Visit - www.bidkon.com.au

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Melbourne’s Trusted Construction Cost Consultants

Control your construction costs with Bidkon's expert cost consulting services. We help you make informed decisions and optimize your project budget.

For More -  https://www.bidkon.com/cost-consulting/

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Need expert quantity surveying in Melbourne? 

Bidkon's team provides accurate cost estimates and financial management for your construction projects.

Learn more: https://www.bidkon.com/quantity-surveyor-in-australia-melbourne/

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Common Mistakes in Cost Estimation and How to Avoid Them

Thus, cost estimation forms an important part of every construction project process and happens to be its major success determinant. Therefore, the aspect of cost estimation is relevant in budgeting and planning, not allowing the aspect of financial consumption to shoot up. These estimations bring about common mistakes that make a huge discrepancy in the reliable estimate of the costs which are to rise. The learning related to these mistakes and the know-how to avoid them is quite important for construction project management firms, cost consultants, and quantity surveyors. 

Underestimating Project Scope

The most common mistake in estimating cost is when there is an underestimated project scope. This usually happens because of ineffective project planning where the requirements of the project have not been well understood. Poorly estimated scope results in delays, cost overruns, and poor-quality work. Elaborate project planning and discussion with stakeholders should pave the way for capturing all facets of a project. Furthermore, engaging the services of construction project management firms will also substantiate definition of scope accurately, otherwise the scope of a project in terms of tender cost estimation will miss out on several elements.

Ignorance of Market Conditions

Ignorant of Market Conditions. Prices of materials, labour, and equipment are bound to fluctuate for a number of reasons—economic scenarios, changes in source of supply, and fluctuations in demand for material, among others. Ignoring these would lead to serious overruns with variances between estimation and actual cost. In order to minimise these risks, the cost consultant shall ensure keeping abreast with market trends in the price level and shall provide for contingencies with all material prices possibly changing within the estimate. Review and update cost estimates on a regular basis in order to reflect prevailing conditions in the market to ensure that it does not lose its accuracy over time.

Poor Risk Management

Poor risk management is another critical cost estimation predicament. Construction projects are prone to being inherently risky in nature, such as risks from weather, unforeseen site conditions, and regulatory changes. In case they are not properly catered for, they may ultimately lead to high cost overruns. Whatever the case, a quantity surveyor should be able to carry out a comprehensive risk assessment and include appropriate contingencies in his cost estimate. The more the risks are identified early and planned for in advance, the more reliable and resilient the cost estimate that the construction project management firm will establish.

Being Negligent About Indirect Costs

Many estimators only consider direct costs like material and labour costs, and most of the time, they skip indirect costs. Examples of indirect costs are those associated with project management, permits, insurance, and overhead. Ignoring such costs during estimating the same may cause underestimation. Therefore, it should be detailed either through direct or indirect costs. Involvement of professional cost consultants with relevant experience will ensure the fact that necessary costs have been taken on board and the cost estimate is made reliable and accurate.

Conclusion

Accurate prediction of cost is important in construction. Construction project management firms, cost consultants, and quantity surveyors can enhance their estimate reliability by observing principles that prevent the usual mistakes in underestimation of project scope, non-consideration of market conditions, improper risk management, and neglecting indirect costs. Adequate planning, continuous market study, effective risk evaluation, and detailed cost breakdown are the major strategies to be followed to enhance the practices regarding cost estimation. This is apart from assisting in delivering projects on budget; they would also help in the overall efficiency and profitability of construction endeavours.

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Five Challenges to Effective Cost Controls.

Cost management is the most critical portion of managing any project and any change in cost estimation directly impacts on the project schedule and scope. The accurate practice of project cost control is very important in any project in orderF to successfully attain the project goal. Advancement in technology has made a mind-set of stakeholders to complete the entire project within tight schedules and low project cost. There are a number of challenges that occur while practicing project cost control in any project.

​Following are the top five challenges that comes across for effective cost controls:

Controlling Scope Variation

​For any project, a budget is prepared beforehand and it is very common to have an inevitable variation in the scope, which leads to variation in the budget. In this scenario, it is very important for the project manager to control the changes in scope. It can be identified that only controlling the variation in scope would help the project manager to make the budget manageable. Therefore, controlling this variation in cost is due to scope variation, which is very difficult and is one of the major challenges faced for effective cost controls.

Accurate Cost Analysis

​Every project requires appropriate analysis of costs for the resources within the project. Project professionals are frustrated due to the difficulty they face in managing and maintaining cost accounting for the project. It is very important for the project professionals to implement effective cost analytical tools in order to monitor the cash flow within the project. Hiring an appropriate accountant for cost analysis is the common challenge that project professionals come across while attaining the required target.

Integrating Schedule and Cost

​Aligning the schedule and budget of the project is another difficult task that project professionals come across in cost control management. In every project, managers of Controlling and monitoring activities and managers for managing cost codes, fiscal periods, and transactions are typically different. Managers responsible for managing WBS (Work Breakdown Structure) and task activities are least aware about the cost analysts who monitors the flow of cash for each activity and so, it becomes very difficult for the cost analysts or accountants to control costs for each task. Therefore, it accounts as a major challenge for project managers to control cost.

Accurate Reporting

​In every project, customers are involved in the project where customers might include stakeholders, the IT business unit, funding authorities, and many more. These customers demand regularly for accurate reports for each activity in order to check its proceedings. Sometimes, it becomes very difficult for a project manager to provide error free reports of all departments associated with the project to its customers.

Adapting Advanced Technology

​There are numerous advancement in project cost management but only an appropriate usage of this technology can lead in attaining the project’s goal. Despite all major advancements in technology, project management is afraid of adapting it correctly. This is also a common challenge to cost control management faced by many project professionals.

Cost management is the most critical portion of managing any project and any change in cost estimation directly impacts on the project schedule and scope. The accurate practice of project cost control is very important in any project in order to successfully attain the project goal. Advancement in technology has made a mind-set of stakeholders to complete the entire project within tight schedules and low project cost. There are a number of challenges that occur while practicing project cost control in any project.

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Cost estimation strategies for 5 different types of cost estimation models

5 Different types of Cost Estimation Models

Controlling Scope Variation

A budget is set in advance for any project, and it is very normal to have an unavoidable change in scope, which leads to a change in the budget. The project manager’s ability to regulate scope adjustments is critical in this circumstance. It has been determined that simply reducing scope variation will assist the project manager in keeping the budget under control. As a result, cost variance is related to scope fluctuation, which is difficult to control and is one of the primary obstacles for efficient cost controls.

Accurate Cost Analysis

Every project necessitates a thorough cost study of the project’s resources. Project managers are dissatisfied by the difficulty they have in controlling and maintaining project cost accounting. It is critical for project managers to deploy effective cost analytical tools in order to keep track of the project’s cash flow. Hiring an adequate accountant for cost analysis is a common problem that project managers face while trying to meet the deadline.

Integrating Schedule and Cost

Another difficult issue that project managers have in cost control management is aligning the project’s timeline and budget. Managers in charge of controlling and monitoring activities, as well as managers in charge of managing cost codes, fiscal periods, and transactions, are often different in each project. Managers in charge of WBS (Work Breakdown Structure) and task activities are sometimes unaware of the cost analysts who track cash flow for each activity, making it difficult for cost analysts or accountants to keep track of costs for each work. As a result, cost control is a significant concern for project managers.

Accurate Reporting

Customers are involved in every project, and these customers may include stakeholders, the IT business unit, financing agencies, and others. These consumers require reliable data for each action on a frequent basis in order to monitor its progress. It can be challenging for a project manager to offer consumers with error-free reports from all departments involved in the project.

Adapting Advanced Technology

There have been significant advancements in project cost management, but only proper application of this technology may lead to the project’s aim being met. Despite considerable technological developments, project managers are apprehensive of properly applying it. Many project managers face this difficulty when it comes to cost control management.

Cost management is the most important aspect of project management, as every change in cost estimates has a direct influence on the project’s timeline and scope. In order to successfully achieve the project goal, accurate project cost control is critical. Stakeholders have developed a mindset to accomplish the project on time and on budget as a result of technological advancements. When it comes to project cost containment, there are a variety of obstacles to overcome.

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Bidkon construction consultants are one of the leading quantity surveyors in Melbourne.  Follow the link:https://www.bidkon.com/services/ To Know More information:[phone] Do Mail Us:[email protected] #bidkon #quantitysurvey #quantity #surveying #quantitysurveyors #tender #estimation #tenderestimation #estimates #tenderestimates #consulting #costconsulting #construction #melbourne #victoria #australia #vic

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Bidkon construction consultants provide integrated project life cycle management including services like quantity surveying, tender estimating, cost control, feasibility studies, project management & etc. Contact us to know more: [phone] mail: [email protected] visit: Quantity Surveyors in Melbourne

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call us to get a quote: [phone] visit https://www.bidkon.com/quantity-surveying/

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Leading Quantity Surveyors in Melbourne, Australia. Bidkon Consultants. contact us to get a quote: [phone] Email: [email protected] visit https://www.bidkon.com/quantity-surveying/

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Quantity surveying, cost estimates, cost control, tender estimates, feasibility studies and many other construction management services at Bidkon Construction Consultants. visit https://www.bidkon.com/quantity-surveying/ or call [phone]

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Reasons why you should hire a Quantity Surveyor call us to get a quote: [phone] Email: [email protected] visit http://bidkon.com.au/

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call us to get a quote: [phone] visit https://www.bidkon.com/quantity-surveying/

[bidkon]

Bidkon consultants are the leading Quantity surveyors in Melbourne, Australia. call us to get a quote: [phone] Email: [email protected] visit https://www.bidkon.com/quantity-surveying/

[bidkon]

visit https://www.bidkon.com/quantity-surveying/ or call [phone]

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Quantity surveying, cost estimating, material takeoff, cost control, budget estimation and many other construction management services at Bidkon Construction Consultants. visit https://www.bidkon.com/quantity-surveying/ or call [phone]