INTRODUCTION

The effective management of budgeting and cost control is crucial for project/process-based organizations. Nowadays, if contemporary organizations want to stay competitive, they are urged to think in terms of process-value added to customers. Budgeting, as well as tracking, controlling & reducing cost represent essential activities to be performed and monitored by organizations as they implement their key processes, activities and operations.

In this workshop participants will learn how to:

- Understand the cost structure of their company;
- Move towards activity-based costing;
- Exploit the advantages of proper budgeting and variance analysis
- Link costing and budgeting with advanced performance management

WORKSHOP OBJECTIVES 

• Best practice, Methods, techniques and systems/software
• Effective CBS and relation with WBS
• Budgeting
• Effective forecasting methods
• Effective analysis and reporting
• Cost control & cost accounting
• EPC projects cost control in a matrix organization (Engineering, procurement, construction, installation & commissioning)
• Level of details for budgeting, actual return, forecasting , etc

Dr. AlBahar, President of PROMIS, Project Management Engineering Systems, is an expert in construction contracts and claims analysis and project management tools and techniques. His recent consulting work is focusing on analysis of delay claims using CPM schedules and amicable settlement of disputes between Clients and Contractors. Dr. AlBahar is a frequent regional and international speaker on all subjects related to project management, construction contracts, tendering procedures, claims analysis and evaluation, contract administration and management, and value engineering.

Dr. AlBahar is a registered arbitrator in the Emirate of Dubai, U.A.E., the State of Kuwait, and was a full time professor at Kuwait University where he taught project management, contracts and specifications, construction management, construction methods, surveying, legal, social and ethical aspects of engineering. He was formerly a marketing and business development manager for Morrison Knudsen Corporation in San Francisco, California

Dr. AlBahar has conducted over 500 public and in-house training courses in the last 25 years on subjects related to contracts, claims, project management, PMP Exam Preparation Workshops, value engineering, budgeting and cost estimating and effective project administrative procedures. His most recent consulting agreement, and as part of team, was to review and rewrite the General Conditions of Contracts and Consultancy Agreement (both General and Particular) for Dubai Municipality and Public Works in Abu Dhabi. He is a Contract Advisor for Qatar Petroleum, Doha, Qatar.

DAY ONE

Introduction to Project budgeting and cost control  

• Budget and cost as a key financial statement
• Approach to cost control
• Modern techniques, systems and software

Cost Breakdown structure (CBS) and chart of account  

• Levels (Overall, Operating centers/Segments, Cost centers, Activity based, Element of cost, Detailed elements)
• Key levels (STD element of cost, Activity cost)

DAY TWO

Budgeting and cost control methods along with their links, if any  

• Activity based
• Chart of account based  

Budgeting and cost control

• Process overview, best practices and responsibilities (In EPC projects and matrix organization).
• Main flow of work (Estimation, Budget and Budget revision, Actual cost of work performed, Ledger and accruals, Earned Budget, Forecasting)

Cost estimation and Budgeting  

• Steps for proper budgeting/estimation assumptions
• Data collection
• Types of budget/estimation
• Budgeting methods
• Budget control  

DAY THREE

Actual Cost allocation and processing

• Job order costing (Cost coding)
• Process costing
• Activity based costing including average rate

Forecasting

• Forecasting best methods and formulas
• Breakeven analysis  

Cost analysis and analysis of variance (rate, Qty and cost)

• Variances determination
• Follow up and performance review
• Budget revisions and forecast adjustment.

DAY FOUR

Variations (Change order/extra work) and budget adjustment

Reporting  

• Best reporting practice and content.
• Project reporting

DAY FIVE

Users’ Cost consciousness and interest/ attraction

• Best practice/ tactics to resolve communication problems and obstacles
• Understanding the need of cost control

 Closeout

• Project Cost this period
• Project Cost to Date
• Cost to Complete
• Percent Complete