{"id":27823,"date":"2024-10-03T10:17:38","date_gmt":"2024-10-03T08:17:38","guid":{"rendered":"https:\/\/clockify.me\/blog\/?p=27823"},"modified":"2026-02-26T12:09:02","modified_gmt":"2026-02-26T10:09:02","slug":"cost-overrun","status":"publish","type":"post","link":"https:\/\/clockify.me\/blog\/business\/cost-overrun\/","title":{"rendered":"Avoid the Dreaded Cost Overrun With This Simple Strategy"},"content":{"rendered":"\n<p>As project management experts often say, <em>\u201clarge cost overruns are the rule, not the exception.\u201d<\/em><\/p>\n\n\n\n<p>This sounds a bit gloomy, especially coming from researchers studying cost overruns.<\/p>\n\n\n\n<p><strong>But what is a cost overrun exactly?<\/strong><\/p>\n\n\n\n<p>A cost overrun, also known as a budget overrun, occurs when the project costs exceed the initially established budget.<\/p>\n\n\n\n<p>Knowing that, the initial quote appears even more scary, doesn\u2019t it?<\/p>\n\n\n\n<p>Here are some tips on how to avoid or minimize project cost overruns.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1196\" height=\"600\" src=\"https:\/\/clockify.me\/blog\/wp-content\/uploads\/2024\/10\/Avoid-the-Dreaded-Cost-Overruns-Using-This-Simple-Strategy-cover.jpg\" alt=\"Avoid the Dreaded Cost Overruns Using This Simple Strategy - cover\" class=\"wp-image-27827\" srcset=\"https:\/\/clockify.me\/blog\/wp-content\/uploads\/2024\/10\/Avoid-the-Dreaded-Cost-Overruns-Using-This-Simple-Strategy-cover.jpg 1196w, https:\/\/clockify.me\/blog\/wp-content\/uploads\/2024\/10\/Avoid-the-Dreaded-Cost-Overruns-Using-This-Simple-Strategy-cover-598x300.jpg 598w, https:\/\/clockify.me\/blog\/wp-content\/uploads\/2024\/10\/Avoid-the-Dreaded-Cost-Overruns-Using-This-Simple-Strategy-cover-1110x557.jpg 1110w, https:\/\/clockify.me\/blog\/wp-content\/uploads\/2024\/10\/Avoid-the-Dreaded-Cost-Overruns-Using-This-Simple-Strategy-cover-768x385.jpg 768w, https:\/\/clockify.me\/blog\/wp-content\/uploads\/2024\/10\/Avoid-the-Dreaded-Cost-Overruns-Using-This-Simple-Strategy-cover-18x9.jpg 18w\" sizes=\"auto, (max-width: 1196px) 100vw, 1196px\" \/><\/figure>\n<\/div>\n\n\n<h2 id=\"1-be-diligent-in-the-project-planning-phase\" class=\"wp-block-heading\">#1: Be diligent in the project planning phase<\/h2>\n\n\n\n<p>Despite being crucial to avoiding cost overruns, the project planning stage is often rushed due to time constraints. This can be counterproductive and cause a project delay in the long run.<\/p>\n\n\n\n<p>So, take time to create a comprehensive project plan.&nbsp;<\/p>\n\n\n\n<p>Here are some <strong>elements of a well-thought-out plan<\/strong>:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Accurate project budget,<\/li>\n\n\n\n<li>Scope statement outlining what needs to be done to complete the project,<\/li>\n\n\n\n<li>Detailed schedule,<\/li>\n\n\n\n<li>Communication plan, and<\/li>\n\n\n\n<li>Extensive risk management plan.<\/li>\n<\/ul>\n\n\n\n<p>Inaccurate cost estimates are a common problem across industries, especially in construction. For that reason, never skip any of the essential <a href=\"https:\/\/assets.publishing.service.gov.uk\/media\/6050c9528fa8f55d324b0c84\/IPA_Cost_Estimating_Guidance.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">stages of cost planning<\/a>, including:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Selecting<\/strong> the right team to work on the cost estimates,<\/li>\n\n\n\n<li><strong>Gathering<\/strong> data and evidence, and<\/li>\n\n\n\n<li><strong>Evaluating<\/strong> uncertainty and risk.<\/li>\n<\/ul>\n\n\n\n<p>It\u2019s a good idea to create the plan collaboratively or have qualified individuals review your plan. A powerful time tracking software, Clockify by <a href=\"https:\/\/cake.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">CAKE.com<\/a>, allows you to share reports so your collaborators can see tracked time and expenses in real time.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"429\" height=\"402\" src=\"https:\/\/clockify.me\/blog\/wp-content\/uploads\/2024\/10\/Sharing-reports.png\" alt=\"Sharing reports\" class=\"wp-image-27822\" srcset=\"https:\/\/clockify.me\/blog\/wp-content\/uploads\/2024\/10\/Sharing-reports.png 429w, https:\/\/clockify.me\/blog\/wp-content\/uploads\/2024\/10\/Sharing-reports-320x300.png 320w, https:\/\/clockify.me\/blog\/wp-content\/uploads\/2024\/10\/Sharing-reports-13x12.png 13w\" sizes=\"auto, (max-width: 429px) 100vw, 429px\" \/><figcaption class=\"wp-element-caption\">Sharing reports in Clockify<\/figcaption><\/figure>\n<\/div>\n\n\n<p>Once you have your detailed project plan in place, the work on the project can begin.&nbsp;<\/p>\n\n\n\n<p>That\u2019s not to say you\u2019re completely out of the woods. A cost overrun can still surprise you, so be on the lookout for any warning signs.<\/p>\n\n\n\n\n<div class=\"banner banner-light clockify-gradient-templates\">\n    <div class=\"banner-text lg:pr-[6rem]\">\n        <span class=\"h4 text-lg translation-block mb-0\">Free time tracker<\/span>\n        <p class=\"translation-block mt-1 mb-3\">Time tracking software used by millions. Clockify is a time tracker and timesheet app that lets you track work hours across projects.<\/p>\n\n        <div class=\"banner-buttons d-flex gap-4 align-items-center translation-block justify-content-center justify-content-sm-start\">\n            <a class=\"bg-white rounded px-3 py-1 text-gray-dark\" href=\"https:\/\/app.clockify.me\/en\/signup\" target=\"_blank\">Sign up<\/a>\n\n                            <a class=\"button-2\" href=\"https:\/\/clockify.me\/apps\" target=\"_blank\">Learn more<\/a>\n                    <\/div>\n    <\/div>\n\n    <div class=\"banner-image banner-image-middle \">\n        <picture>\n            <source srcset=\"https:\/\/clockify.me\/blog\/wp-content\/themes\/cake-blog\/theme\/images\/banners\/clockify\/templates@2x.png 2x\" alt=\"Illustration\"  media=\"(min-width: 1022px)\" \/>\n            <img decoding=\"async\" src=\"https:\/\/clockify.me\/blog\/wp-content\/themes\/cake-blog\/theme\/images\/banners\/clockify\/templates.png\"  alt=\"Illustration\" \/>\n        <\/picture>\n    <\/div>\n<\/div>\n    \n\n\n\n<div class=\"wp-block-group pro-tip\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n<p><strong>\ud83d\udca1 CLOCKIFY PRO TIP<\/strong><\/p>\n\n\n\n<p>If you\u2019re struggling to make effective long and short-term plans, check out this article:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/clockify.me\/blog\/managing-tasks\/short-term-planning-and-long-term-planning\/\" target=\"_blank\" rel=\"noreferrer noopener\">The Differences Between Long-Term and Short-Term Planning<\/a><\/li>\n<\/ul>\n<\/div><\/div>\n\n\n\n<h2 id=\"2-look-for-cost-overrun-warning-signs\" class=\"wp-block-heading\">#2: Look for cost overrun warning signs<\/h2>\n\n\n\n<p>If the projected cost seems too good to be true \u2014 it probably is. But how do you know for sure that your budget estimate is too optimistic?<\/p>\n\n\n\n<p>Here are some <strong>warning signs<\/strong> of an upcoming project cost overrun to look out for:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Your team is unable to reach milestones on time.<\/li>\n\n\n\n<li>The project needs additional resources.<\/li>\n\n\n\n<li>Communication among team members is infrequent or characterized by misunderstandings.<\/li>\n\n\n\n<li>The project scope is unexpectedly growing.<\/li>\n\n\n\n<li>Some tasks need rework due to mistakes or change requests.<\/li>\n<\/ol>\n\n\n\n<p>These are just some project hiccups that can lead to a cost overrun.<\/p>\n\n\n\n<p>A time tracker like <a href=\"https:\/\/clockify.me\/\" target=\"_blank\" rel=\"noreferrer noopener\">Clockify<\/a> can help you identify cost overrun warning signs early on.\u00a0<\/p>\n\n\n\n<p>For instance, the <a href=\"https:\/\/clockify.me\/help\/projects\/forecast-chart\" target=\"_blank\" rel=\"noreferrer noopener\">forecasting feature<\/a> predicts project performance by showing you:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Estimated time<\/strong> \u2014 the time it would take to complete the project based on your estimates,<\/li>\n\n\n\n<li><strong>Scheduled time<\/strong> \u2014 the time you scheduled when assigning tasks to team members,&nbsp;<\/li>\n\n\n\n<li><strong>Completed time<\/strong> \u2014 the time tracked by team members thus far, and<\/li>\n\n\n\n<li><strong>Forecasted time<\/strong> \u2014 the project&#8217;s expected completion time based on hours tracked by that point.&nbsp;<\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1104\" height=\"588\" src=\"https:\/\/clockify.me\/blog\/wp-content\/uploads\/2024\/10\/Forecasting.png\" alt=\"Forecasting\" class=\"wp-image-27821\" srcset=\"https:\/\/clockify.me\/blog\/wp-content\/uploads\/2024\/10\/Forecasting.png 1104w, https:\/\/clockify.me\/blog\/wp-content\/uploads\/2024\/10\/Forecasting-563x300.png 563w, https:\/\/clockify.me\/blog\/wp-content\/uploads\/2024\/10\/Forecasting-768x409.png 768w, https:\/\/clockify.me\/blog\/wp-content\/uploads\/2024\/10\/Forecasting-18x10.png 18w\" sizes=\"auto, (max-width: 1104px) 100vw, 1104px\" \/><figcaption class=\"wp-element-caption\">Forecasting in Clockify<\/figcaption><\/figure>\n<\/div>\n\n\n<p>To make sure the forecasted time doesn\u2019t exceed the estimated time \u2014 enable <a href=\"https:\/\/clockify.me\/help\/projects\/alerts\" target=\"_blank\" rel=\"noreferrer noopener\">project alerts<\/a>. The app will notify you when the project reaches a set percentage of the estimated time.<\/p>\n\n\n\n<p>Detecting cost overrun warning signals in the beginning stages of your project allows you to implement measures that ensure your project stays within budget.<\/p>\n\n\n\n<div class=\"wp-block-group pro-tip\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n<p><strong>\ud83d\udca1 CLOCKIFY PRO TIP<\/strong><\/p>\n\n\n\n<p>If you detect signs of a time overrun and can\u2019t afford to extend the budget, consider fast tracking \u2014 give this article a read:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/clockify.me\/blog\/managing-tasks\/fast-tracking-in-project-management\/\" target=\"_blank\" rel=\"noreferrer noopener\">Get Back on Track with Fast Tracking in Project Management<\/a><\/li>\n<\/ul>\n<\/div><\/div>\n\n\n\n<h2 id=\"3-establish-measures-to-manage-scope-creep\" class=\"wp-block-heading\">#3: Establish measures to manage scope creep<\/h2>\n\n\n\n<p>Scope creep is a major cause of cost overruns. It happens when the <strong>demands of a project evolve<\/strong>, and more steps are required to complete a project.<\/p>\n\n\n\n<p>To successfully deal with scope creep, you\u2019ll need a <strong>robust change control plan<\/strong>. This plan should clearly outline how you and your team should deal with changes in project scope.<\/p>\n\n\n\n<p>Here are some of the steps this plan should follow:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Identify the change,<\/li>\n\n\n\n<li>Determine the goals of the change,<\/li>\n\n\n\n<li>Define the timeline of change implementation, and<\/li>\n\n\n\n<li>Assemble a team in charge of change management.<\/li>\n<\/ol>\n\n\n\n<p>Apart from creating the plan for change control, offer support to your team.<\/p>\n\n\n\n<p>According to <a href=\"https:\/\/www.pmi.org\/learning\/thought-leadership\/future-of-project-work\" target=\"_blank\" rel=\"noreferrer noopener\">PMI\u2019s 2024 Pulse of the Profession\u00ae report<\/a>, supportive programs, referred to as <em>enablers<\/em>, significantly reduce the chances of <strong>scope creep<\/strong>. Some of the programs the report listed include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Coaching project managers in support of their professional development,<\/li>\n\n\n\n<li>Providing training when implementing changes in the work process,<\/li>\n\n\n\n<li>Establishing communication channels for teams to discuss and inquire about the changes, and<\/li>\n\n\n\n<li>Arranging change management training.<\/li>\n<\/ul>\n\n\n\n<p>This PMI report uncovered that among the organizations surveyed, those who didn\u2019t offer any enablers experienced a <strong>scope creep in 39% of projects<\/strong>. In contrast, a scope creep occurred in 28% of projects with enablers.<\/p>\n\n\n\n<p>Preparing your team to adapt to potential scope creep ensures you can take necessary steps on time to prevent a cost overrun.<\/p>\n\n\n\n<h2 id=\"monitor-project-progress-with-clockify-by-cake-com\" class=\"wp-block-heading\">Monitor project progress with Clockify by CAKE.com<\/h2>\n\n\n\n<p>As a <strong>time and expense tracking tool<\/strong>, Clockify can help you keep the project costs in check. Using a time tracking app in addition to your usual <a href=\"https:\/\/plaky.com\/blog\/how-to-choose-project-management-software\/\" target=\"_blank\" rel=\"noreferrer noopener\">project management software<\/a> helps you detect potential cost overruns early.<\/p>\n\n\n\n<p>That\u2019s because, in many cases, <strong>time delays increase project costs<\/strong>. By having your team track project time on each task, you\u2019ll be able to detect any potential time overruns and prevent them.<\/p>\n\n\n\n<p>Additionally, you can have your team account for all the money spent on the project by having them <a href=\"https:\/\/clockify.me\/help\/track-time-and-expenses\/expenses\" target=\"_blank\" rel=\"noreferrer noopener\">add expenses<\/a> in Clockify. When adding new expenses, the team can define the type of cost and the amount, as well as attach receipts.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"600\" height=\"776\" src=\"https:\/\/clockify.me\/blog\/wp-content\/uploads\/2024\/10\/Expenses.png\" alt=\"Expenses\" class=\"wp-image-27820\" srcset=\"https:\/\/clockify.me\/blog\/wp-content\/uploads\/2024\/10\/Expenses.png 600w, https:\/\/clockify.me\/blog\/wp-content\/uploads\/2024\/10\/Expenses-232x300.png 232w, https:\/\/clockify.me\/blog\/wp-content\/uploads\/2024\/10\/Expenses-487x630.png 487w, https:\/\/clockify.me\/blog\/wp-content\/uploads\/2024\/10\/Expenses-9x12.png 9w\" sizes=\"auto, (max-width: 600px) 100vw, 600px\" \/><figcaption class=\"wp-element-caption\">Creating an expense in Clockify<\/figcaption><\/figure>\n<\/div>\n\n\n<p class=\"custom-btn\"><a href=\"https:\/\/app.clockify.me\/en\/signup\" target=\"_blank\" rel=\"noreferrer noopener\">Track expenses with Clockify<\/a><\/p>\n\n\n\n<p>To successfully avoid a cost overrun, you\u2019ll need tools to <strong>track time, monitor tasks, and communicate with your team<\/strong>. For an affordable price, you can try the <a href=\"https:\/\/cake.com\/bundle\" target=\"_blank\" rel=\"noreferrer noopener\">CAKE.com bundle<\/a> that offers our time tracker Clockify, project management software Plaky, and team communication tool Pumble.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"802\" height=\"600\" src=\"https:\/\/clockify.me\/blog\/wp-content\/uploads\/2024\/10\/Clockify-pricing.jpg\" alt=\"Clockify pricing\" class=\"wp-image-27819\" srcset=\"https:\/\/clockify.me\/blog\/wp-content\/uploads\/2024\/10\/Clockify-pricing.jpg 802w, https:\/\/clockify.me\/blog\/wp-content\/uploads\/2024\/10\/Clockify-pricing-401x300.jpg 401w, https:\/\/clockify.me\/blog\/wp-content\/uploads\/2024\/10\/Clockify-pricing-768x575.jpg 768w, https:\/\/clockify.me\/blog\/wp-content\/uploads\/2024\/10\/Clockify-pricing-16x12.jpg 16w\" sizes=\"auto, (max-width: 802px) 100vw, 802px\" \/><figcaption class=\"wp-element-caption\">Clockify pricing plans<\/figcaption><\/figure>\n<\/div>\n\n\n<p class=\"custom-btn\"><a href=\"https:\/\/app.clockify.me\/en\/signup\" target=\"_blank\" rel=\"noreferrer noopener\">Try Clockify by CAKE.com today<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A project cost overrun happens when the project costs exceed the budget estimate. Here\u2019s how to avoid it.<\/p>\n","protected":false},"author":50,"featured_media":27828,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8],"tags":[],"class_list":["post-27823","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"acf":[],"_links":{"self":[{"href":"https:\/\/clockify.me\/blog\/wp-json\/wp\/v2\/posts\/27823","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/clockify.me\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/clockify.me\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/clockify.me\/blog\/wp-json\/wp\/v2\/users\/50"}],"replies":[{"embeddable":true,"href":"https:\/\/clockify.me\/blog\/wp-json\/wp\/v2\/comments?post=27823"}],"version-history":[{"count":9,"href":"https:\/\/clockify.me\/blog\/wp-json\/wp\/v2\/posts\/27823\/revisions"}],"predecessor-version":[{"id":36318,"href":"https:\/\/clockify.me\/blog\/wp-json\/wp\/v2\/posts\/27823\/revisions\/36318"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/clockify.me\/blog\/wp-json\/wp\/v2\/media\/27828"}],"wp:attachment":[{"href":"https:\/\/clockify.me\/blog\/wp-json\/wp\/v2\/media?parent=27823"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/clockify.me\/blog\/wp-json\/wp\/v2\/categories?post=27823"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/clockify.me\/blog\/wp-json\/wp\/v2\/tags?post=27823"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}