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Cost management is the process of planning, monitoring and controlling spending. The following are common examples of cost management.Developing accurate cost estimates to support spending decisions. For example, an construction firm that validates cost estimates with reference class forecasting.
Cost analysis such as cost-benefit analysis, cost efficiency and cost effectiveness calculations.PlanningPlanning such as business plans, project plans and operations planning that document how costs will be spent and why.
BudgetingDeveloping, validating, approving and controlling budgets.ProcurementThe process of acquiring goods and services including due diligence such as price comparisons.The management of finances and accounting. For example, segregation of duties for submitting, approving and auditing expenses.
Managing resources to avoid wasted expense. For example, supervision of a contractor to ensure they are delivering to commitments.GovernanceOversight of spending. For example, a program governance board that can cut off funding to a project that is over-budget, late or failing to achieve objectives.|
| Type | | | Definition | The process of planning, monitoring and controlling costs. | | Related Concepts | |
Financial Management
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