Estimating accuracy, job costing and profitability are all improved through indirect cost management including cost controls and consistent methods of allocation to jobs.
The very definition of indirect costs is widely open to interpretation and there is no “standard” line between what is a direct cost, an indirect cost or overhead. What is important is that indirect costs are consistently managed with processes specific to your company and aligned with both estimating and job costing.
Effective indirect cost management is the core to accurate job costing which is the heart of a contractor’s financial management systems.
If applicable, indirect costs are also core to effective billings on GMP or IPD projects. In the unfortunate event of a claim, indirect costs are often missed if they are not accounted for consistently and accurately.
We have significant experience, models and tools for helping Contractors more effectively manage their indirect costs.