The Step-by-Step Construction Cost Reporting Guide

Weather conditions, overtime, and the rising costs of materials—all can affect a project’s progress. But with the right planning and organization, you can avoid major cost overruns.

Construction cost reporting is essential to the process of managing a construction project. Without effective cost reporting, you can’t effectively estimate the cost of new jobs or accurately bill clients. You may even fail to turn a profit.

Let’s look at construction cost reporting, why it’s important, and how you can build your next construction cost reports with our all-in-one construction cost reporting guide.

What Is Construction Cost Reporting?

Construction cost reporting is the process of tracking and documenting all costs associated with a construction project. This includes both fixed and variable costs, as well as any unexpected or unforeseen expenses that may arise. Construction cost reporting is essential for effective project management, as it allows you to keep track of your budget and make necessary adjustments along the way.

There are a variety of tools and apps available to help with construction cost reporting. These typically include features such as real-time tracking and reporting, budget management, and scheduling. 

Did You Know?

Workyard is an all-in-one GPS-powered time tracking, scheduling, and task management app. Schedule and track your employees in real-time—and never wonder about the accuracy of their hours again.

Why Are Construction Cost Reports Important?

Without construction cost reports, it’s impossible for companies to effectively manage their costs and communicate changes in budget or schedule. Accurately tracking and reporting your costs helps you stay on track throughout the project—and makes you aware of potential overruns while they can still be mitigated.

After a project is completed, construction cost reports provide valuable insights into how expenses are trending over time. They can help you understand areas where costs are increasing or decreasing, areas that need improvement, and potential areas of opportunity.

Construction Cost Reporting Guide

Let’s get into how you actually create a construction cost report. Construction cost reporting should be completed not when the project is over but at intervals throughout the project—to determine whether the project is still on track. Follow these steps to ensure successful and accurate reporting:

1. Gather All Necessary Cost Data and Documentation 

To create an accurate construction cost report, it’s essential to have a complete understanding of all costs associated with the project. This includes fixed expenses, variable expenses, direct expenses, indirect expenses, and any incidentals that occur throughout the project.

Fixed costs are those that do not change, regardless of what happens on the job site. They include fees, permits, insurance, equipment—things that should more-or-less stay the same. Variable costs fluctuate depending on the circumstances; this includes labor, material costs, and rentals.

Mobile cost tracking apps, such as Workyard, make it much easier to keep accurate records of labor-related expenditures and mileage throughout the project. With Workyard, you’ll never have to wonder how many hours have been billed to a project so far—and you’ll never have to worry about the accuracy of the numbers.

2. Analyze Your Cost Data and Make Any Necessary Adjustments

Review your cost data regularly to spot any areas where costs may be increasing or decreasing. Identify problem areas and create a game plan. 

Say that a project that you expected would cost $14,000 is now at $18,000—and it’s still not complete. Your construction project reports should indicate why overruns have occurred.

If materials costs have increased dramatically, it may be something to discuss with a client. If labor costs are far exceeding what you anticipated, it could either be a productivity issue or a miscalculation.

3. Isolate Your Client Reimbursements

If you are getting reimbursed for certain expenses, keep track of them as the project progresses. Not only do you need to keep your client apprised of the situation, but you also don’t want to lose track of your costs and theirs.

Workyard automatically tracks not only employee labor but also mileage and travel time, making it easier to attribute individual costs to clients.

4. Communicate Any Changes in Budget or Schedule to Staff As Needed

Communication is of paramount importance on any construction site. Keep employees aware of schedule changes and address budget issues when they occur. 

Workyard provides real-time data, so your organization can adjust and adapt to scheduling and budget changes. The faster you’re able to address a budgetary issue, the less likely it is to lead to a massive overrun.

Construction cost reporting is an essential part of effective project management. Better construction cost reports will ultimately improve your bottom line.

Improve Your Construction Cost Reporting With Workyard

As anyone in the construction industry knows, you need the right tool for the job.  

Workyard provides powerful labor tracking, scheduling, and task management solutions—within a single, easy-to-use app. With Workyard, you can create detailed real-time labor reports, import them directly into your accounting software, and effectively track client reimbursements like mileage. Check out a free trial of Workyard today or text/call us at 650 332-8623.

FAQs

What Is Cost Reporting in Construction?

Cost reporting in construction refers to the process of tracking and managing costs associated with a construction project. This can include fixed and variable expenses, as well as any unforeseen or unexpected costs that may arise over time. Construction cost reporting is important to avoid going over budget.

How Do You Monitor Construction Costs?

There are several ways to monitor construction costs, including using specialized software programs, analyzing cost data regularly, and communicating with project stakeholders about any changes in budget or schedule. Workyard helps you track your labor-related costs in real-time.

What Is Included in the Construction Cost Report?

A construction cost report should include all costs associated with the project, such as materials, labor, overhead, and any unexpected or unforeseen expenses. Workyard’s construction cost reports provide a complete picture of your project’s progress and costs.