FINANCIAL MANAGEMENT AND CONSTRUCTION

In the construction sector, where projects are frequently capital-intensive and call for careful
resource allocation and usage, financial management is essential. Construction projects are
finished on schedule, within budget, and with appropriate returns on investment when
effective financial management is practiced. Throughout the construction process, this entails
risk assessment, budgeting, cost control, cash flow management, and strategic financial
planning to maximize resources and reduce financial hazards.
An employer will want to know the expected cost of his planned project early on. A "order of
magnitude” or “budget estimate” is typically the most accurate estimate that can be provided
until a feasibility assessment of the project has been finished. There are three primary ways to
produce this:
1. By reference to the cost of similar projects - When utilizing reference costs from similar
projects, it’s essential to provide accompanying data, including project scale,
components, unique attributes, construction dates, and whether the cost encompasses
land, legal, and engineering expenses. This ensures thorough comparisons and enhances
accuracy in estimating project costs.
2. By sketch layout and component costing - Through sketch layout and component
costing, it’s possible to approximate the size of project components, enabling estimation
of their potential costs by comparing them with price data for similar structures. This
approach can also uncover costs for items that might have been overlooked otherwise.
3. By use of cost curves if available - Utilizing cost curves, if accessible, can be unreliable as
the data underlying such curves is often lacking, and each civil engineering project
typically has unique features significantly impacting its cost. Consequently, costs
expressed per unit of size or output can vary considerably. Nonetheless, a cost curve can
serve to assess the realism of costs derived from other methods.
The final estimate of cost drawn up by the engineer should be based on current prices and
include a substantial contingency sum. It need not include for possible future inflation of prices,
because this is a matter for the employer’s financial advisers to deal with, but the basis of the
estimate should be clear. The possible range of the cost should be shown, but whether the
employer chooses to quote the highest or lowest estimate is up to him.
CONSTRUCTION REPORTS
A report is an account given or an opinion which is expresses formally on the basis of
investigation or consideration. The keywords in that definition are “formally” and
“investigation”.
In the construction industry, reports are usually formal documents conveying details about
significant events, project milestones, or procedures to clients, local authorities, and buyers.
They may also offer broader insights into the condition of various aspects, spanning from
specific components to the overall construction sector or the broader economy.

Presentation, Format and Purpose

1. If feasible, write a short letter rather than a report.
2. Write a report rather than a long letter.
3. Write a report for professionals or laymen as required.
4. Avoid jargon.
1. Use formats to save time and avoid mistakes.
2. Have a standard cover.
3. Have a content list.
4. Have an appendix.
5. Bind to open flat.
6. Plans should be A4 or easily openable.
7. The report should be part of overall presentation.

Content and Style

1. Put facts first.
2. Out opinions, deduced from facts, in the conclusion.
3. Advice should be included as part of the conclusion.
4. End with a question to ensure a follow up.
5. A summary may be put after the introduction or as a separate sheet inside
the cover.
6. Avoid cross-referencing.
7. Be clear and brief.
8. A good report needs many drafts.
9. Check grammar, punctuation and spelling.
APPENDICES

FORMAT: PROGRESS REPORT TO CLIENT

REFERENCES

S.W. Nunnally (2007). Construction Method and Management. 7th Edition.

Pearson Education, Inc., Upper Saddle River, New Jersey 07458.

Sarausad, Fidel. (2006). Construction Project Management User’s Manual. 2 nd

Edition.

Burroughs, A. (2017). Lease or Buy? Factors to consider before buying an

Equipment. https://www.sbnonline.com/article/lease-buy-factors-consider-
buying-new-equipment/

Puerifoy, R. et al. (2006). Construction Planning, Equipment, and Methods. 7 th

Edition. Mc Graw Hill.

Chappel, D. (1996). Report Writing for Architects and Project Manager. 3 rd Edition.
Blackwell Science.

Oberlender, G.D. (2000). Project Management for Engineering and Construction.

2nd Edition. Mc Graw Hill.