Critical Cost Management Practice for Project Managers

by Gary Kennedy, P. Eng., PMP (2024-08-14)

Project Managers and the core team members will benefit from adhering to key principles of accounting and quantity surveying. For example, the correct management of a log/ledger:

As discussed in the "Project Change Management & Control" video (re-linked below) between the 11th and 19th minutes, the Change Log line items can be flagged for the different types of costs, contracts, schedule effects, engineering integrity, and other impacts on the project.

[CLICK Video Link: "Project Change Management & Control" ]

It is very important for the PM and other Project Team members, when using a Change Log (and other logs for Risk, RFIs, Cost Reports, Invoicing, etc.), that they should "NEVER" erase anything that's already been entered as a record in that log.

It's an IMPORTANT part of the paper trail, and provides clarity to the log/ledger changes when handed/viewed from one person to the next. Instead, you should keep that record visible and learn how to "Back Out" the line item(s) and put an appropriate note in the comments column.

The ramifications of "not" doing this for project records, contract management, project controls, and audits could be very serious, in fact, potentially disasterous.

Perhaps for a future post I can team up with one of my PQS (Professional Quantity Surveyor) friends to chat about handling accruals, journal entries, progress payments do's and don'ts, etc.

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Notes - Other Benefits of Correct Change Log Management

It enhances productivity of your team because folks aren't digging through the files for DAYS to find all the separate documents to piece a complex puzzle together. Do you want your ever-changing team members spending multiple days at this?

...or do you want them to spend just 5 (five) MINUTES finding clarifications in a log (aka ledger) because you correctly handled journal entries for changes?

It reduces the chance of a significant error(s), perhaps even a crisis with contracts. It should all be summarized and integrated in a log so that it can be easily understood and managed as it's passed from one rep to another. Some of these reps could be PM Team members, internal/external auditors, legal reps, and other important executives.

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