The Importance of Quantity Surveying in Cost Control

In the dynamic world of construction and project management, maintaining tight control over costs is a paramount concern for successful outcomes. This is where the role of quantity surveying emerges as a critical factor. Quantity surveyors play a pivotal role in ensuring efficient cost control throughout the entire project lifecycle. Their expertise and meticulous analysis not only help in budget optimization but also contribute to effective decision-making, risk mitigation, and timely project delivery. In this article, we explore the fundamental importance of quantity surveying in cost control and how these professionals add value to construction endeavors.

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What is Quantity Surveying?

Quantity surveying mainly deals with the estimation, control and planning of the cost of a construction project. All the activities listed below come under this.

• Cost estimation
• Cost planning
• Value engineering
• Feasibility studies
• Cost-benefit analysis
• Lifecycle coasting
• Valuation

Quantity surveying essentially helps a business to use the resources it has in hand such as manpower, material and money effectively. This job is done by a quantity surveyor. For doing this job, a quantity surveyor should have up-to-date knowledge and information regarding the market, tools and other equipment that might help to plan and schedule the construction activities and resource allocation. Another field in which a quantity surveyor should have thorough knowledge is Risk analysis. A quantity surveyor should be able to do a detailed risk analysis and decide between retaining and transferring the risks found. All in all, we could say that good knowledge of construction technology is essential for this job position as many other responsibilities including contract procurement, dispute resolution and tender evaluation come under their job profile.

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What is Cost Control?

It is the process of finding and reducing the expenses of a business in order to attain more profits. Cost control begins with the budgeting process. The firm owner or the employee concerned makes a comparison between the actual financial results of the company and the budgeted expectations. If the actual cost is higher than the expected value then the management needs to take action according to the given information. For example, the business can obtain raw materials from a vendor who will be able to sell it at a reduced price. Similarly, many companies use outsourcing as a method for cost controlling as paying a third party to do a task is rather profitable and time-saving than doing it themselves. Cost control plays an important role in maintaining and growing profitability.

The difference between budgeted and actual expenses is called the variance. Therefore we can say that variance analysis is used as a critical tool to identify areas that could be improved and make appropriate changes. A company should perform a variance analysis every month on each revenue and expense account. The largest variances (preferably the largest percentage difference) should be addressed first as they are the ones that have the most impact on the company’s results.

Cost control is extremely important. In a market, the low-cost producers are the people who make the most profit. Decreasing costs is the key to increasing the efficiency and profitability of any business.

Types of Cost

There are different types of costs. They are listed in the table given below.

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Quantity Surveying in Cost Control

As we discussed above, the cost control target is to use the resources with maximum efficiency. But nowadays the costs are ever increasing. So, construction industry promoters insist on designing and executing projects for giving maximum value to the money. Therefore quantity surveyors are employed in a large amount during the design stage in order to give pieces of advice to stakeholders regarding the probable cost implications of their requirements and decisions. As time goes on, construction technology becomes more logical and complex and employers become cleverer in their Rising prices, capital constraints, and rising interest rates have prompted employers to demand that their professional advisers accept cost as an element in design and that they make sure adequately balanced costs throughout all phases of the construction project, as well as a precise estimate of overall cost. requirements. So it is important to improve and refine tools that are used for cost control. And hence the Quality surveyor should ensure the value of money. Cost limits for projects adopted by construction management techniques presently contribute to making the people in the industry aware of the value and efficiency of money. Due to this, Quantitative surveyors are put to greater use in establishing cost charges in the consideration of alternative solutions and cost control as a continuous procedure.

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The limited objective of cost control should actually be emphasized.  They identify deviations from the project plan rather than suggesting areas for possible cost savings. This indicates an advanced stage where project control becomes rather important. Major cost savings can be done only during the stages of planning and designing. Cost control cannot be enacted during the construction because the deviation from premade plans will cause a delay in the project and also leads to undue cost rise. From this, we can say that the focus of project control is on achieving the original plan or showing deviations from these plans. It’s not about searching for cost savings or any other significant improvements. Major changes to the original construction plans will only occur when a rescue operation is required.

The construction plan and the cash flow allocated to it provide a reference line for further project monitoring and control when it comes to cost control on a project. The progress of activities can be monitored by compare g the actual progress of individual activities and the reaching of milestones should be compared to the project schedule. The contract and job specifications offer the criteria for assessing and ensuring the required construction quality. The final or detailed cost estimate serves as a baseline for evaluating financial performance throughout the project. When expenses are within the detailed cost estimate, the project is considered to be under financial control. Overruns in specific cost categories indicate the likely occurrence of problems and provide insight into the nature of the problems encountered. The categories incorporated into the final cost estimation are the focus of expense-oriented construction planning and control.

The original comprehensive cost estimate usually gets transformed into a traditional project budget in the form of a bill of quantities for monitoring and control purposes, and this project budget, which is typically put together by a cost professional known as a quantity surveyor, is then used as a guide for management. Particular components from the detailed cost estimate are converted into job cost elements. During the duration of a project, expenditures are documented in specific job cost accounts and then compared to the original cost estimates in each category. Individual job cost accounts are thus the basic unit for cost control. As an alternative, job cost accounts can be broken down or divided into work elements that are linked to both specific scheduled activities and specific cost accounts.

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Roles of a Quantity Surveying in Cost Control

A quantity surveyor has many responsibilities when it comes to a project. Some of them are listed below.

• Make the tender and contract documents which may include quantities with architects, clients etc.
• Conduct cost analysis for maintenance and repair work.
• Provide an estimate of material costs.
• Provide assistance in establishing clients’ needs.
• Perform risk management.
• Perform value management.
• Conduct cost control.
• Conducting analysis of construction blueprints.
• Conduct feasibility studies.
• Give advice on procurement strategy.
• Find, analyse and find solutions for possible commercial risks.
• Hire and divide work between sub-contractors.
• Developing and maintaining documents that keep track of project costs.
• Travelling to company sites.
• Negotiating contracts so that they will stay within planned budgets
• Give advice about contractual claims.
• Conduct analysis of outcomes and prepare comprehensive progress reports.
• Value finished work and arrange payments.
• Have good awareness of various building contracts in use.
• Settling financial and accounting issues for a business.
• Having knowledge about health and safety regulation’s implications.
• Preparing and analysing costing for tenders
• Offer advice on the topic of property taxation.
• Helping clients in locating and gaining access to additional and alternative funding sources.
• Enabling clients to start construction projects.
• Providing advice on the costs associated with particular building maintenance.

Quantity Surveyor as a Career Path

With a favourable work-life balance and appealing earning potential, quantity surveying is a highly desired profession. Additionally, there is a ton of room for growth and specialization in this area. Starting out as an assistant quantity surveyor, assistant cost manager, or assistant manager and working your way up to assistant vice president, assistant director, or general manager is a viable career path. Jobs in this sector are anticipated to grow as a result of the boom in the infrastructure and construction sectors brought on by the country’s rapid urbanization. It is common for various surveyor types to be needed at construction sites to work in designated estimation and costing areas. Depending on a person’s background, schooling, company and location, a quantity surveyor’s average pay may change. A quantity surveyor makes an average yearly base salary of Rs.3,26,407.

Job Titles Coming Under Quantity Surveying

There are many other jobs a person can get other than being a Quantity Surveyor if you are qualified in Quantity Surveying. A few of them are listed in the table below for your reference.

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The article above gives us an overall idea of the roles, responsibilities and job profile of a Quantitative surveyor and importance of Quantity Surveying in Cost Control. We have also discussed possible job titles and salaries coming under the same career path. Consult with your mentors to learn more about this subject

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