Cost controlling

What is cost controlling?

Cost controlling is a management system that focuses on the planning, management, and monitoring of all business areas to efficiently achieve financial goals. In the construction and real estate sector, cost controlling encompasses all phases of a project—from initial cost planning through to the commissioning of a property. It ensures that projects remain within the established budget and that all financial resources are utilized optimally. The PROBIS control module integrates and optimizes all essential cost controlling tasks.

The Importance of Cost Control in Project and Real Estate Management

Cost control is essential in project and real estate management, as it monitors and adjusts a project’s financial framework to identify and correct deviations at an early stage. The most important tasks of cost control include:

• Planning: Setting realistic budgets and financial goals at the start of a project.
• Control: Monitoring cost trends and adjusting the budget as needed.
• Monitoring: Regular review of actual costs and progress compared to planned figures.
• Risk Management: Identifying and minimizing financial risks throughout the course of the project.

Effective cost control ensures that a project remains cost-effective and that profitability is maximized.

Areas of Responsibility in Cost Controlling

Cost control encompasses a wide range of tasks that are all interconnected and span the entire lifecycle of a project:

• Cost planning: Preparing a detailed budget based on planned orders and expected costs.
• Budget management: Monitoring and adjusting the budget throughout the project to prevent cost overruns.
• Contract Management: Overseeing contracts from signing through to completion to ensure compliance with the budget.
• Change management: Managing additional orders and changes that may result in unforeseen costs.
• Risk Management: Identifying and assessing financial risks that could impact the project budget.
• Procurement processes: Structured and efficient awarding of contracts and services to keep costs under control.
• Billing processes: Monitoring and reconciling billed costs and services rendered.
• Scheduling: Ensuring that project schedules align with available financial resources.
• Cash flow planning: Managing cash flows to ensure that sufficient liquidity is available for the project.
• Reporting: Regular reporting to project stakeholders, banks, and investors to provide greater transparency regarding the financial situation.
• Forecasts: Proactive adjustments to financial planning based on current developments and changes as the project progresses.

Cost Control in the Real Estate and Construction Industry

Cost control plays a particularly important role in the real estate and construction industries, as these sectors often involve significant investments and complex project structures. Typical examples of cost control include:

• New construction projects: Ensuring that the construction project stays within the planned budget, despite potential price increases and unforeseen costs.
• Renovations and refurbishments: Monitoring renovation costs and comparing them with the original budget.
• Real Estate Development: Precise management of the overall cost trajectory of a portfolio or individual projects to ensure optimal profitability.
• Financial Management: Monitoring cash flows and expenditures in relation to financing from banks or investors.

Related terms

• Project controlling
• Budgeting
• Risk management
• Financial Planning
• Supplementary management

Cost Control in PROBIS

The PROBIS control module makes cost management simple and efficient. PROBIS supports project managers and companies by:

• Centralized budget management: All financial data and budgets are consolidated into a clear, organized structure.
• Automated forecasts: Projected cost trends are continuously updated, allowing for a timely response to changes.
• Risk Management Integration: Risks are integrated into financial planning and controlling to identify variances at an early stage.
• Detailed reporting features: PROBIS offers customized reports for stakeholders, investors, and banks, enabling transparent and informed decision-making.
• Optimization of procurement processes: This module enables a structured and transparent tendering and awarding of contracts.
• Efficient change order management: All change orders and modifications are recorded in detail and integrated into the controlling system.

With these features, PROBIS enables effective and precise cost control throughout the entire project lifecycle.

Conclusion: What is cost controlling?

Cost control is an essential tool in project and real estate management that encompasses the planning, management, and monitoring of project costs. It ensures that projects remain cost-effective and that financial goals are achieved. PROBIS offers a powerful cost control module that enables precise budget management, risk analysis, and transparent reporting.

‍