Detailed estimates are the best tool contractors have for cost control during the construction process.
Cost control is required to verify that on-going expenses are in agreement with estimated costs.
If on-going expenses surpass the original estimate and no corrective action is taken, the total construction cost could end up consuming the expected profits and even the contractor's capital if the project is finished at a loss. During these audits, several pieces of information are gathered to compare expected versus actual costs. First, a percentage of completion for the different cost items is determined. Second, an estimate is made regarding the cost of materials stored at the site. Finally, accrued expenses are calculated up to the date of the inspection.