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Both scheduling and cost control are make-or-break aspects of construction projects, but in many cases the two areas are kept very separate from one another — the project scheduler and financial controller may never be in the same room to hash out a plan.

Cost and schedule are both keys to project success, and each impacts the other a great deal. That said, it’s worth considering the potential benefits of creating a cost-loaded construction schedule that has the two sides work together to optimize the schedule for greater cost control.

This article will explain what it means to have a cost-loaded construction schedule, how they may benefit construction projects and the risks and benefits of using them.

What is a cost-loaded construction schedule?

A cost-loaded schedule integrates project scheduling and cost management into a single process that outlines the timeline to complete project activities and also assigns costs to them, providing a complete overview of the work of the financial and chronological aspects of the project. Cost-loaded schedules combine the schedule of values and a project schedule together into a single management tool.

Cost-loaded schedules add to traditional baseline schedules, which lay out project activities end-to-end, detailing who needs to do what, where, when and in which order. They pay close attention to any scheduling conflicts and dependencies and attempt to arrange activities to use resources as effectively as possible.

Cost-loaded schedules give contractors and owners a better grasp on how money is being spent as the project goes on by linking activities together — leading to better management decisions and increased trust and transparency.

Contractors may avoid cost-loaded schedules because they take a lot of work and resources to create and give the owner a very clear window into the flow of money across the project. Although there is a bigger workload at the outset, contractors can realize huge benefits from cost-loaded scheduling.

The components of a cost-loaded schedule

• Work breakdown structure (WBS)

  WBS) dissembles large projects into smaller, more management tasks that will be used to create the schedule and budget for a project. A cost-loaded schedule uses the WBS to build in costs, so the document has to be accurate down to the finest detail in order to get accurate cost figures for the project.

• Activities and Timelines

  The schedule will lay out project activities using tools like Gantt charts and network diagrams to show tasks as they need to be completed, providing start dates and due dates for each and indicating activities that need to be completed before others can begin.

• Costing Information

  Each activity and task will include a cost estimate, so that readers can see when expenses will occur along the project timeline.

Assigning costs to their associated tasks is a simple procedure when it comes to direct costs. Indirect costs like overhead and equipment costs have to be dealt with according to a predefined system — contractors may choose to allocate them to the beginning or the end of the project.

What are the Benefits of Cost-Loaded Schedules?

Contractors and owners can both gain valuable insights into construction financials by building out cost-loaded schedules.

Allows for Earned Value Management

When costs are associated directly with construction activities, contractors can take advantage of Earned Value Management (EVM) practices, accurately assessing the extent of work completed against planned value.

Efficient Forecasting and Budgeting

When contractors spend the time and effort to build a cost-loaded schedule, they gain the benefits of seeing their budgets the way they see their schedules – laid out chronologically along a timeline. Planning the costs sequentially allows construction teams to allocate their resources effectively for better cost management.

Better Cash Flow Forecasting

Owners and contractors can both see the demand for capital along a project timeline, allowing for better planning and fewer cash crunches.

While both owners and contractors benefit from cost-loaded schedules, some contractors avoid the practice because of the extensive work they have to put into building one out. Cost-loaded schedules also require contractors to get very transparent with owners by spelling out exactly where and when project costs will come.

Plan and react smarter with cost-loaded scheduling

Here’s an example of how cost-loaded scheduling can lead to better project outcomes.

Imagine a concrete contractor who’s broken out a project into the following phases: design, site prep, formwork, reinforcements, mixing, pouring, curing and formwork removal. The contractor breaks these phases out into individual tasks and attaches their associated costs to them in the schedule.

During the project, the contractor notices that there’s been a delay in site preparation which has increased costs. The contractor can adjust the project timeline to move some funds from the pouring process, which won’t start for many more weeks, to cover the extra costs until cash flow can be adjusted, avoiding a cash flow crunch and allowing for the project to continue smoothly.

4 Steps to Creating a Cost-Loaded Schedule

Creating a cost-loaded schedule is simple, but not easy. The real work involves getting several stakeholders involved in appropriate breakdown and accurate costing.

1. Schedule the project.

   Create a WBS that breaks down the project into individual tasks.

2. Calculate the costs.

   Calculate the costs associated with that task including labor, materials or equipment rentals.

3. Assign the costs.

   Assign the costs to the schedule, attaching them to the timeline of their associated activities. Don’t forget to allocate indirect costs according to internal systems.

4. Update as needed.

   Continue to update the schedule and its associated costs according to progress and cost changes.

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The Future of Cost-Loaded Scheduling

Cost-loaded scheduling provides a lot of insight for owners and contractors into how funds are being allocated over the course of a project. As construction projects get bigger and more complex, the added connection between budget and progress will only become more welcome.

Further, more sophisticated technological tools will help create cost loaded schedules. For example, many construction project management platforms allow users to assign costs to help track true costs as the project moves on and provide valuable data for building future cost-loaded schedules while decreasing the workload involved.

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