budgeting & cost management

The process of estimating the proper cost that should reasonably be expected to be incurred against a clear baseline, understanding how and why actual costs occur, and ensuring that the necessary response is taken promptly to ensure actual costs come under budget.

Typical information needed for cost management includes: 1. Budgets (including estimating), generally based on work breakdown structure or code of accounts 2. Obtaining and recording commitments/accruals 3. Measurement of work accomplished and value earned/valuation of work, including treatment of changes (change control) and claims 4. Cash flow 5. Forecast out-turn costs 6. Variance analysis of the trend in forecast versus previous out-turn cost,

SOURCE: apm.com