Capturing of costs in construction is a necessity to build and complete a successful project, insure budgets are met, and provide historical data for estimating future projects. Once costs are stored they can be analyzed for accuracy, forecasting the final cost, and usefulness of accurately tracked cost in future bidding processes. The cyclical nature of construction projects, when tracked and managed effectively, provide excellent historical data.
Cost tracking methodologies require activity codes for each specific scope of work, type of units, and number of units or quantity (qty). Activity codes are generally established in an estimating template and are typically 4 to 8 digits in length. The first few numbers represent a general type of work. Each subsequent number corresponds to a more specific type of work. For example, initial grading of a site is given a code starting with a 1, whereas compaction of existing ground to receive fill is given a code starting with a 12. To assist with sequencing the lower numbers correspond with earlier phases of work and the higher numbers correspond to later phases of work. For instance, installation of underground utilities would have a code of 2315 and installation of final landscaping would have a code of 8955.
Once each scope of work is assigned an activity code, units of measure, number of units and an estimated cost are applied. Units of measure include linear feet (lf) for items such as sewer pipe, storm drain, and curbs; square feet (sf) for flooring, sheetrock, and paint; and tons (tn) for asphalt and aggregate base. These units of measure provide a mechanism to apply daily production to each code based on number of units completed or installed. Heagney (2012) agrees that you have to track progress by recording times daily.
Daily timecards are used to record labor hours, equipment hours, and material costs in addition to daily production. Using the hourly rates ($l) for each employee and piece of equipment ($e) multiplied by the number of hours (h) for each, plus quoted cost for materials ($m), will equal the total daily cost ($t) for each activity:
($l x h) + ($e x h) + ($m) = ($t)
Daily production is measured based on the quantity of units completed on that day, as established when the activity codes were setup, for each type of work. Dividing the total daily cost ($t) by the daily production (qty) gives the unit cost ($/qty) for that activity:
($t) / (qty) = $/qty
This provides construction managers a mechanism to track production and follow work progress against the established budgets.
Production tracking is usually accomplished with the use of a spreadsheet or cost capturing software that provide cumulative costs and quantities by summing the daily timecard inputs ($t and qty). Reports can then be generated from the spreadsheet or cost tracking software that show cost to date, unit costs to date and quantities to date compared to the budgeted values. Analysis of this information...