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TOOLS & TIPS  to  Monitor and Control 


The Cost of a project answers the question "How Much Money" will you actually spend to do the project work. To Monitor Cost you will compare project spending to your Cost Plan, to see if the money is being spent to do the right things and at the right times. Your Cost Plan will tell you when to inspect costs (milestones) and what to check for. 


To Control Cost you will make the necessary corrections to get "back on plan" as required. Occasionally you might need to change the plan to preserve the project budget. Then, only after trying all possible remedies, or after you have been given significant approved scope change, should you consider requesting a change to the budget of your project.

While it might not be possible to monitor everything, do pay special attention to activities whose estimated costs are less certain.

Cost Control


The best tool to monitor Cost, is the   Cost Control Sheet    which you can open and print a sample, or just see below. This is our project to plan a parade. We will use the initial plan without fast-tracking and without crashing, for this example.

Project Steps

Click on photo to get (back) to project step

The Cost Control Sheet is an extension of your Activity List , developed when making the Time plan.

LEGEND for Cost Control:

​   Budget Cost: This is your Estimated Cost from your Activity List, now called

                         Budget because you have the approval to spend. The total budget

                         for the project is called Budget at Completion (BAC)

  CTD: Cost To Date is the money already allotted to purchase orders and work

            orders. It is not the Actual amount of money paid to employees and

            vendors. (See Note below)

  CTC: Cost To Complete is the best estimate of cost it will take to complete the

              Activity, beyond the CTD already allotted. Do not simply use subtraction of

              CTD from the Budget Cost. Instead, estimate a real evaluation beyond the

              CTD. This gets more accurate as the project progresses.

  TEC: Total Expected Cost is simply the sum of CTD plus CTC. This is how much
           we expect the Activity to have cost, at completion. This is sometimes called

           the Estimate at Completion (EAC)

  Variances: These are differences compared to Budget. We could also show these

                     as percentages of budget.

CAUTION: The Cost Control Sheet is not to contain any Contingency funds you set aside to control Risk. That money is held in a separate account to be used if, and when the Risk arises.

In our example, above:

  • The project is expected to finish $250 over budget (negative variance means bad news!)

  • The largest Variance At Completion (VAC) is the Activity "Arrange Bands" which will finish $200 over budget. It is also the Activity with the largest Budget Cost.

  • Two Activities "Obtain Floats" and "Get Clowns" are showing favourable (positive) variances (savings) at completion.


In our analysis of Time we stated that only activities on the Critical Path can affect the project completion date. However, in analyzing Cost, all Activities can affect the TEC. The project is expected to finish over budget and we would like to get that back on track. While $250 might not seem like much, on a larger project it could be $25,000 or $250,000.

  • Activity 3.1.2 is in trouble and needs some corrective action

  • Activity 3.2.1 should be watched closely

  • Variances on the other Activities are tolerable at this time.

CONCLUSION: The project is at risk of costing $250 more than budget, which is almost 9%. We need an Action Plan to reduce the TEC by $250.

What are the benefits of monitoring cost in this format?

Here are a few:

  • Concise Report. You can see “results at a glance”

  • Can be set up at any level: summary high level, or lower level detailed

  • Can be set up by project phases, stages, or accounts

  • Extremely flexible. Fits with you organization's conventions

  • Conforms to commonly used estimating and budgeting formats

  • Works in conjunction with any scheduling method

  • Tracks labour costs, material costs, sub-contractors costs

  • Allow you to try an infinite number of "what if" scenarios

  • Flags potential troubles in time for you to take preventative action

  • Can track absolute and percentage variations for future improvements

  • Accommodates progressive billings and labour


In our project we need to find a way to correct the Cost problem of likely finishing $250 over budget. We need to get the Cost "back on track". This means having a hard look at CTC so look at Activities with the largest CTC's for the most potential in Cost reduction. How can I reduce CTC?


  • Look at Resources. Can a less expensive resource do the job?

  • Look at Quality. Can a lower grade of Quality work for this project?

  • Look at Procurement. can a more competitive process lower the cost?

After those considerations, look at adjusting the baselines for Scope or Time or Cost.

  • Scope: Deliver less, or something different, for Cost reduction.

  • Time: Extend the completion date (ie: reduce overtime) for Cost reduction.

  • Cost: Increase the Budget

In project management, an adjustment of one baseline to improve another is called a "Trade Off".


Baseline changes will require approval of the authority who signed the initial Project Charter (usually the Sponsor).


NOTE: Why do we use Allotted Costs, and not Actual Costs, for project cost control?


It is important to realize that as soon as we assign (allot) money to a purchase order, that money is no longer available to spend on other items. Even if the money is still in our bank account, we have already made a commitment to pay someone, so that amount of money is no longer available.


To prevent 'spending the same dollar twice' we use Allotted Costs in project cost control. This is the amount of money already assigned to purchase orders. It is added to our CTD immediately upon making the commitment to purchase. Don't wait for the invoice, or bill payment, to record your CTD. Those come too late!

However, financial accountants are most interested in Actual Costs, which is money actually paid out of the bank account to someone. This is because they need to make sure enough money is in the bank before we pay the vendor, employee, etc.  Actual costs are less "in time" as they follow the activity; usually by at least 2 weeks, and often by a month or more, considering the time to get an invoice and pay the money.


Financial accountants plan "Cash Flow" which deals with "When will the money actually be spent?"

Budget Components.jpg

Your organization might have set aside a Management Reserve to cover true surprises (unknown-unknowns). Access to these funds will be through a special approval process. The Management Reserve added to the baseline makes the total Project Budget.

Final Thought (diagram below)

The budget, which you as Project Manager have access to, was approved as part of your project plan. In planning you may have allowed a contingency reserve for each Activity, then rolled up the activity costs to work packages and added a project contingency reserve.This is your approved baseline with which you can manage scope and identified risks.

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