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Cost Management
Cost Management
Project cost management is an essential component of launching any new project. Without managing the costs, you run the risk of going over budget and having the project fail before it even gets off the ground. In this article, we discuss what project cost management is and how you can best achieve the results you’re looking for.
What Is Project Cost Management?
Project cost management is the way that you estimate and allocate financial resources to any given project. It’s a process that looks to manage and control costs so that you can fully understand your project’s financial status. Good project cost management will help project managers track and foresee expenses and make adjustments to the project as needed to fulfill its requirements.
Benefits of Cost Management
There are key benefits to effective cost management of company projects that include:
- Keeps projects within budget parameters
- Reduces risk of unforeseen costs
- Helps managers plan ahead
- Can reduce the costs of a project when managed properly
- Tracks project progress
Challenges of Cost Management
Project cost management has certain challenges that it faces:
- A lack of financial resources can set limitations on labor or materials
- Forecasting can be inaccurate and lead to overruns and a decrease in overall project profitability.