5 Things Construction Project Managers Should Know Before Allocating General Condition Money
When it comes to managing a construction project, there are many factors to consider to ensure its success. One crucial aspect that project managers need to pay attention to is the allocation of general condition money. General condition costs encompass various expenses that are essential for the smooth operation and completion of the project.
However, it is important to note that general condition money should not be treated as a part of the budget. In this blog post, we will explore this topic in detail and provide valuable insights for construction project managers who are looking to streamline their processes and optimize the allocation of resources.
- Understand the Purpose of General Condition Money
Before delving into the specifics, it is crucial for project managers to have a clear understanding of the purpose of general condition money. Unlike the budget, which accounts for direct project costs such as labor, materials, and equipment, general condition costs cover indirect expenses that are necessary to support the project’s progress.
These costs include temporary facilities, site security, insurance premiums, permits and fees, project management software, and other administrative expenses. The purpose of allocating general condition money is to ensure that the project runs smoothly and efficiently.
- Separate General Condition Costs from the Project Budget
One common mistake that project managers make is including general condition costs as a part of the project budget. This can lead to a skewed financial overview and may result in inaccurate cost estimations.
To avoid this, it is crucial to separate general condition costs from the project budget. Create a separate category for these expenses and allocate funds accordingly. This allows for a more accurate assessment of the project’s financial health and ensures that sufficient resources are available for general condition needs.
- Audit and Track General Condition Expenses
To effectively manage general condition money, project managers need to establish robust audit and tracking processes. Regularly auditing and tracking expenses associated with general conditions is essential for keeping costs in check and identifying areas where efficiencies can be made.
By maintaining accurate records and using reliable project management software, construction project managers can ensure that general condition expenses are accounted for, and any discrepancies or unnecessary costs can be identified and addressed promptly.
- Optimize General Condition Expenses with Technology Solutions
Harnessing the power of technology can significantly optimize the allocation of general condition money. Construction project management software solutions provide essential tools for streamlining processes, enhancing communication, and improving overall project efficiency.
With technology solutions in place, project managers can automate tasks, track expenses in real-time, generate comprehensive reports, and collaborate seamlessly with team members. This not only saves time but also helps identify areas for cost savings and enables informed decision-making regarding the allocation of general condition money.
- Collaborate with Stakeholders to Make Informed Decisions
Effective communication and collaboration with stakeholders are vital for making informed decisions regarding general condition expenses. By involving all relevant parties, including owners, contractors, subcontractors, and project team members, project managers can gain valuable insights and perspectives.
Engage in regular discussions and consultations to ensure that general condition expenses align with project goals and objectives. By fostering a collaborative environment, project managers can gain buy-in from stakeholders and make well-informed decisions that optimize the allocation of general condition money.
Conclusion
As construction project managers, understanding the importance of general condition money and how to allocate it effectively is essential for a successful project. By treating general condition costs separately from the budget, auditing and tracking expenses, leveraging technology solutions, and collaborating with stakeholders, project managers can ensure that resources are used efficiently and projects are completed on time and within budget.
Remember, general condition money should not be viewed as a part of the budget but rather as a crucial aspect of managing construction projects. By following these key insights and implementing best practices, construction project managers can protect their general condition money and ensure the smooth operation of their projects.
MySmartPlans is the leading software solution for construction project management, offering transparency, organization, and efficiency to ensure on-time and on-budget completion of projects. With our experienced digital information librarians and data governance capabilities, we help mitigate risks and prevent litigation in the construction industry.
