Hello friends 👋
Cost reporting is an essential function of your role as quantity surveyor. You will deliver this service in both pre and post contract roles. In this post I will discuss ways in which you can improve your cost reports in the post-contract setting.
If you don't know already, a cost report is a document which presents the financial position of a project. It identifies, the budget, the spend to date, and future liabilities.
This is a critical document because it informs the client about their financial obligations. If your client is an established public sector organisation, they will most likely have their own templates in place. When you work for private clients you will provide a template of your own (usually your firm's cost reporting template).
A good cost report lays out the position of a project in a simple organised fashion.
It should have the following sections:
Project Budget Identifies funding already allocated to the project via purchase orders
Contracted Works Identifies the financial breakdown on the main contract, i.e. how much has been spent to date and what's remaining on the original contract.
Instructed Variations - Identifies any formal changes to the original contract. It is best to keep variations as a separate category as they often funded via alternative means.
Anticipated Variations - Identifies potential changes which are being considered but have not yet been instructed. Once an instruction formalises one of these, they move to the Instructed Variations section
Note - Depending on what contract (NEC / JCT) you are using, the above may be broken down into four categories rather than two:
Instructed Loss / Expense
Anticipated Loss / Expense
This is because time and money are dealt with together in NEC and separately in JCT. You should also note that provisional sums are permitted in JCT contracts but not NEC, so in JCT cost report you'd have a section for it too!
Risk Allowances - Identifies the amount of risk funding the client has set aside to deliver these works. These allowances should have been determined by some form of risk estimate.
In my experience, most clients prefer a high level one page summary of the above, with the detail provided as back-up. Your summary should be concise and informative enough to relay the pertinent talking points. This comes with practice and speaking to your stakeholders about what information they actually need.
Don't provide information for the sake of it - it is just noise which distracts from the main purpose of the cost report!
That's all for this post folks, if you have any thoughts on the above feel free to message me on LinkedIn!