After the start of a certain project, the company sent people to the project to conduct cost forecasts, and determined the sub-project costs, classified costs and total project cost targets; when the project was completed, except for fixed expenses and other items that did not ex

The so-called subjective reasons refer to cost factors that can be controlled by the project department without any external influence. The following summarizes the 11 major subjective reasons for project losses! Come check your project for signs of these conditions!

There is no cost control target or it is not implemented.

Although there is a cost control target, it is not strictly implemented, which makes the cost of the project department out of control. For example, a project department of a company, during the construction of a small bridge in a certain engineering project, designed more than 800 tons of cement, but actually consumed more than 3,000 tons, and the actual consumption was more than 2.5 times more than the designed amount.

If the project department determined the cost control target, how could such a large error occur? Another example is a project department of another enterprise. After a certain project started, the enterprise sent people to the project to conduct cost forecasts, and determined the sub-project cost , classified costs and total project cost targets; when the project was completed, in addition to Except for fixed expenses (including management fees handed over, depreciation fees for fixed assets withdrawn, and overhaul fees) and other items that do not exceed the estimated costs, all variable expenses such as labor, materials, fuel, accessories, and indirect expenses of the project department are all Overspending occurs, the most important of which is the overspending of materials and accessories, with the actual cost being more than 50% higher than the estimated cost;

even considers the factors that increase the cost of design changes and calculates all the increased budget expenses as costs. The actual cost is also more than 30% higher than the estimated cost. Why can fixed expenses be controlled but variable expenses cannot? The problem is that the overall goal of cost control is not strictly implemented, and the control of sub-project costs and classified costs is not implemented, resulting in total cost overruns.

Insufficient systems for materials and components

In project departments that are losing money, it is common to purchase materials and accessories (hereinafter referred to as materials) without a plan. If experienced material personnel carry out the procurement task, the quantity of materials purchased is still insufficient. It will not exceed too much and will not cause too much loss and waste; however, due to the expansion of the business scale of the enterprise, many project departments, especially the material personnel of the loss-making project department, have no experience to speak of, and the procurement of materials is very casual, and it is common to purchase over the quota. , the purchase quantity depends entirely on the project leader or even the material clerk, and the result will inevitably be a backlog of materials and overspending.

In the material procurement stage, high prices and the quality of some materials are not up to standard are another factor. It is difficult for any experienced materials personnel to grasp relatively reasonable price information. In addition, sellers use rebates, benefit fees, etc. to attract purchasing personnel, making it difficult for the project department to purchase materials at relatively reasonable prices, which increases the material cost of the engineering project; If individual purchasing personnel deliberately commit fraud and intentionally raise material prices to make a profit, the project department will suffer even greater losses. In addition, due to the reduction of some enterprises' credit ratings and the need for cash flow, sellers are very concerned about whether to purchase materials in cash, resulting in a large price difference between cash and non-cash purchases of materials, with the highest difference being more than 10%; while the project department Due to financial constraints, or procurement personnel not calculating the capital cost in the process of purchasing materials, they end up purchasing high-priced materials, thus increasing the cost of the engineering project. Furthermore, because some purchasing personnel knew little about the quality standards of materials, they purchased some materials that did not meet the quality standards, which increased the actual amount of materials consumed and caused cost overruns.

does not have a sending and receiving system at all during the material acceptance, storage, and delivery stages. No one checks and accepts the materials purchased by the material procurement personnel, and there is no physical account, so there is no room for storage and delivery; or even though there is a sending and receiving system, there is no acceptance check Not timely and serious, the storage is useless, the account items do not match, who takes it and who uses it, and the last account is written off; especially for floor materials such as sand, gravel, bricks and tiles, there is no dedicated department to manage them from beginning to end, and they are purchased instead of consumed; In serious cases, false material invoices are even used for reimbursement, while no materials were purchased at all.

During the material consumption stage, materials were not distributed according to the quota, and the construction workers were given as much as they needed. As a result, the excess materials were either wasted and thrown on the construction site, or were secretly sold by the construction site personnel, and many recyclable waste materials were left unmanaged.For example, the remaining steel materials and steel formwork on the construction site are disposed of without authorization, and the recovered material money is divided privately.

Contracting measures are not matched

① The contracting plan stipulates how many tasks will be completed and how much salary will be paid, but there are no clear requirements for the consumption of materials and the use and maintenance of equipment, resulting in a contract that does not include materials, profits but not losses, and finally the task is completed , but the material cost was overrun, the performance of the equipment was reduced, and the entire project was at a loss;

② Although the material and machinery costs included in the unit project quantity were clarified in the contracting plan, the transferred material price was higher than the material price in the contracting plan High, employees are dissatisfied, leading to contract miscarriage;

③ Although the contracting plan is reasonable, the pricing is not timely, or the contracting plan cannot be cashed out, making the contracting unable to proceed.

There are loopholes in the subcontracting project

① For the labor subcontracting team, wages are calculated and paid according to the completed project tasks, but a strict quota payment system is not implemented, resulting in the labor subcontracting team using materials at will, resulting in material overruns;

② For the subcontracting team The number of projects in some processes of the team's construction was double-priced, which resulted in over-allocation of project funds and ultimately losses;

③ was very arbitrary about the price of subcontracted projects, without recalculating according to quotas and budget standards, and only set a random amount to extract management fees proportion, the final management fee extracted was not enough to compensate for the cost of bidding;

④ did not even consider the winning bid price, subcontracting the project at a price higher than the winning bid price (not the reason for the low winning bid price), resulting in huge losses ;

⑤ uses a large number of subcontracting teams, with the largest number reaching more than 300, resulting in constant occurrences of over-allocation and arrears of subcontracting teams, and ultimately losses;

⑥ is affiliated with multiple external units, and only charges a symbolic amount of management from the affiliated units In the end, the affiliated unit left, and all the aftermath costs were borne by the affiliated project department, resulting in huge losses.

has serious quality problems.

Project departments with serious losses almost all have serious quality problems, which leads to repeated construction such as rework, repair, and rip-and-restart, which increases project costs. For example, in tunnel construction, there are large problems such as excavation deviation from the main line, non-standard construction causing landslides, arch fall, side wall collapse, etc. Small problems include over-excavation, under-excavation, side wall lining misalignment, concrete strength Insufficient, honeycomb pockmarks and other phenomena; in the construction of bridges, there are phenomena such as foundation sinking and pier deflection in large bridges, while in small bridges, there are misaligned piers and abutments, insufficient concrete strength, honeycomb pockmarks and other phenomena. The existence of these phenomena has led to an increase in the amount of ineffective projects, increased investment in manpower, materials, and equipment, and ultimately increased costs.

The utilization rate of construction equipment is not high.

is very concerned about the projects he undertakes. In order to ensure uninterrupted construction, he blindly purchases or transfers a large amount of equipment from other projects for backup, and even purchases some equipment that is not needed for this project, resulting in long-term equipment downtime. This not only occupies precious cash, but also prevents the urgently needed people, finances and materials for construction and production from being available in time or increases financial expenses. It also increases depreciation and equipment maintenance expenses, causing a sharp increase in the cost of the project department.

Unreasonable construction arrangements

For example, during the construction process, the project department could not reasonably allocate manpower, materials, equipment and other resources, resulting in waste of work; the construction arrangements of some processes were unreasonable, and those that could be completed in one step were actually carried out twice. It took three times to complete, resulting in rework; the construction sequence of some processes was reversed, which increased a lot of ineffective manpower, materials and capital investment, resulting in a significant increase in costs, etc.

There are many safety accidents

Most project departments have safety accidents of varying degrees. Minor injuries affect employees from going to work and increase labor expenses; serious injuries not only affect employees from going to work and increase labor expenses, but also require medical expenses and increase indirect expenses. , at the same time, it may also reduce the physical fitness and skills of employees, reduce labor capacity and labor efficiency, and ultimately increase labor costs and indirect costs; fatal accidents not only increase huge pension expenditures, directly increase cost expenditures, but may also affect employees' emotions and reduce Production efficiency ultimately increases labor costs and overhead costs.

Indirect expenses are poorly controlled

The most important ones are office expenses, travel expenses, transportation expenses and business entertainment expenses that are out of control. Some project departments have no plan for office expenses, and they buy whatever they want. They buy high-end office supplies at will, and the cost of mobile phones is astonishing. Some project departments have no standards for travel expenses, so they can fly as they please and stay in any high-end hotels. Some project departments ignore the actual situation of the project department. Employees do not need to be paid, and all debts owed to outsiders do not have to be repaid. However, cars cannot be rid of, and they are becoming more and more high-end, resulting in a sharp increase in vehicle depreciation, fuel costs, and maintenance costs. .

The financial management chaos

is specifically reflected in: First, there is no complete financial management system. All revenue and expenditure operations of some loss-making project departments are controlled by individual leaders and financial, planning, material and other personnel. These people spend whatever they want, instead of relying on systems to determine expenditures and supervision to constrain expenditures, resulting in all expenditures being ineffective. No one knows the plan, the profit or loss of the project.

Second, the management of monetary funds is chaotic. Some project departments open multiple bank deposit accounts but do not check and clear them in time. Bank receipts and payment vouchers are not entered in time. IOUs are not entered in the account and are used as cash. As a result, materials cannot be put into the warehouse in time and personal debts cannot be cleared in time. The bank Deposits and cash accounts do not match, and huge costs are hidden in bank deposits and cash balances, resulting in a profit before the project and a loss later or a loss for the entire project.

Third, the confirmation of claims and debts is inaccurate and settlement is not timely. Some project departments not only record prepaid goods and project payments on the creditor's side, but also record payment and project payments payable on the debtor's side for sales and subcontracting units. However, due to untimely accounting or lack of careful verification during settlement, In the end, the payment for goods and projects was overpaid, resulting in losses. Some project departments do not clear up the receivables in a timely manner. Later, because the debtor unit has no money, goes bankrupt, or exceeds the statute of limitations for recourse, the receivables cannot be recovered, resulting in losses.

Fourth, the calculation of income and costs is inaccurate. Some project departments do not know how to calculate project settlement income, and calculate the contract amount as pricing income, and then calculate the profit and loss, forming a profit before and a loss afterward; they treat the appropriation as pricing income, making the project department's profit and loss in each period untrue. If the construction unit owes If the amount of the payment is large, the project department will create false losses. Some project departments never register the income calculated by the construction unit in their account books, and prepare the income statement in the report based on their impressions. The actual situation is completely different from the prepared income statement. Some project departments do not know how to calculate costs and omit expenses that should be included in the cost, such as fixed asset depreciation and employee welfare expenses that should be mentioned but not mentioned, taxes that should be paid, pension insurance premiums, medical insurance premiums, unemployment Insurance premiums, housing provident funds and superior management fees, materials that have been used but not yet paid, employee wages that should be paid but have not been paid, etc., thus leading to inaccurate costs and inaccurate profits and losses.

Fifth, basic accounting work is poor. Some project departments do not review accounting vouchers seriously and carefully, the voucher procedures are incomplete, and the basis for reimbursement is insufficient; some project departments do not register account books in a timely manner.

Contract management is confusing

There is no awareness of contract management, and little knowledge about contracts such as purchasing goods, hiring personnel, providing services, subcontracting projects, contracting projects, etc., and does not understand the conclusion, validity, performance, and purpose of the contract. Basic elements such as rights, obligations and liability for breach of contract lead to chaotic contract management and companies suffer huge economic losses.For example, some project departments signed a contract with the other party with only a lower-case amount. When the other party tampered with the lower-case amount and sued the court, the case was lost due to insufficient evidence from the company; some project departments signed a contract with the other party with only a quantity but no unit price, only a unit price but no quantity, or only a quantity. , the unit price does not have a total price contract, resulting in constant lawsuits and seriously affecting the credibility of the company.