Definition
Project costing (also: project cost calculation) is used to determine the required budget for the execution of a project. It is an essential component of project management.
Procedure of Project Costing
Before a project is started, a cost estimate must be made for the quotation preparation. For this purpose, various methods are used, such as a cost-benefit analysis, the Top Down or the Bottom-Up method, to check whether the project is profitable at all. This also forms the basis for the quotation calculation.
For the calculation, at least the following points should be taken into account in the project budget:
- Effort estimation for project execution
- Change budget
- Risk budget
- Financial buffer
To simplify this process for you, a suitable software for project costing will best support you here.