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Why you need accurate project reports

accurate project reports

Why you need accurate project reports

“I’m busy, and there is money in the bank account; I don’t need fancy reports to tell me if I’m making money or not!” Many a builder has said this or a variation of it over the years. While some continued to be successful many realised there is a difference between having money in the bank and making money, unfortunately for some too late.

Several vital metrics can drive success in your business project analysis is not a complex process, and it is about understanding the costs and managing the margin.

We will look at some of these critical metrics. These should be broken down to a Cost Category level allowing you to easily see where you are ahead and behind across the project. 

Often these categories align to fundamental project orders.

Original Budget: 

When you start the project, it is important to accurately understand the potential project costs; these include direct and indirect costs. The total cost to you to complete the build is based on the information you have and the contract you are going to sign.

Potential Change/Variations:

This captures any potential (not yet formalised) change to the project’s cost; some may be customer variations, some may be costs that will not result in additional revenues.

Confirmed Change/Variations:

This is where a known change has impacted the project. This can be a result of a Customer Variation or a Budget Move (contingency or budget reallocation).

Current Budget

This is the sum of the Original budget and the Confirmed Change/Variations

Total Procured Amount

The total amount of ordered material or supply as of the date. This includes orders not yet delivered and represents the potential cost; this may be important if, due to price changes, your expenses on timber or other products have increased beyond the budget. Understanding the procured value will show areas where you have committed to spending more than your budget.

Total Invoiced Amount

The total amount of actual invoices as of the date. This provides insight into progress; if you have been invoiced 20% of the budget but on review are only 10% through the project, you may have just had early expenses or that your project is heading to a significant overage.

Forecast Cost

This can be calculated using a formula or entered but should be done regularly and review the potential costs remaining for each category within the project.  


Timber Supply

  Original Budget



  Potential Change



  Confirmed Change



  Current Budget



  Total Procured Amount



  Total Invoiced Amount



  Forecast Cost (WCS)



 * WCS = Worst Case Scenario

Additional Metrics can include (depending on the kind of business)

– Man Hours (Planned v Actual)

– Equipment Hours (Planned v Actual)

– Estimated % Complete

– Calculated % Complete (Actual/Budget)

With a solid understanding of the project costs, it is also essential to track the revenues.

– Original Contract

– Pending Variations

– Approved Variations

– Current Contract Value

– Total Billed (As at date)

– Total Paid (As at date)

– Forecast Revenue

This information will then provide the most important metric of all. Margin tracking. It is essential that you have a benchmark margin and that each project is being constantly assessed against that margin. Whilst this is commonly done at the total project level, it may be possible to also review this at the stage level (depending on the types of claims that you do)

– Total Forecast Revenue / Total Forecast Cost

Suppose you expect projects to achieve a 15% margin; then, by running these reports, you can identify all projects outside of that target and focus on the root cause for any variance. The intention needs to be that every project makes a margin, as this will genuinely ensure that there are funds in the bank account and that you are busy doing valuable work.

Talk to Thrive today about gaining accurate project reports that will help your business.