The largest place in the overall structure is occupied by direct costs, which are calculated by taking into account the norms and existing prices, as well as the volume of construction work performed. Planned savings are a rather important component of the whole process, since it performs a number of tasks, without which it is impossible to imagine the modern construction process. In the final calculation, planned profit helps to make it the most accurate and correct.
Planned savings are …
Estimated cost contains three components:
- Direct costs - these are costs that are directly related to the manufacture of materials that may include cost.
- Planned savings are estimated profits.
- Overhead expenses - include those expenses that are incurred as a result of the work.
Estimated profit or planned savings mean real profit, which is taken into account when choosing the price of all products for construction.
The specified norms when calculating planned savings are calculated as a percentage in accordance with the cost of construction materials. As a rule, it is about 10%.
Particular attention is paid to the estimated price of the object. It has already been drawn up taking into account the price, which includes planned savings, that is, all technical equipment, various furniture and materials, and also includes payment for all installation work performed. There are also other components to which the appraiser also draws his attention.
What to look for?
It is important to distinguish when evaluating structures that were built before and after 1991. This is necessary, since buildings built before 1991 had a different cost, since the percentage of planned savings, overhead expenses and other expenses - all this had a different price than nowadays. It is necessary to recalculate and derive a value that will be loyal to everyone and will not depreciate expensive building materials.
Existing Norms
Planned accumulation is a concept that has its own elements and norms. The norm is set for all existing types of construction work and installation. The approximate percentage of direct expenses and other expenses is 6%.
The norm of planned savings remains the standard for all types of work, as well as for people involved in it. Subtract the norm as a percentage of the price of direct and overhead costs.
What gives the right and wrong definition?
Planned accumulation is an important definition that helps in the construction to subtract all the costs incurred very accurately and correctly, and also with their help you can do the analysis, guided by the results. Despite the fact that the concept has a lot of positive aspects, it is still perceived skeptically, as existing standards cannot give a one hundred percent statement about the self-sufficiency of all organizations in construction.
If the planned costs decrease or, conversely, increase, then this should all be taken into account at the time when there is a full calculation of the cost of the work performed. The process of lowering or increasing is due to the differentiation of existing costs.
Organizations involved in construction and installation, in the case when they have a level much lower than the norm, can face serious problems. If the company is going to change equipment or switch to a new system, then often it doesn’t work out for her, since there are very few funds and they cannot create various funds where the flow of finance is stimulated. The only thing that is available to them is an increase in the profit plan, and this happens not only during the modernization of production, but also in the subsequent period. Moreover, all profit for a certain time will be inferior. After all, part of it will be transferred to different funds.
Highlights in the concept of "planned savings"
As already noted, the existing and current norm of planned savings in relation to all types of work is 6% of direct and overhead costs.
All established norms for invoices or storage, procurement resources, for planned savings are indicated in a separate resolution. It is called "Building Norms and Rules" (Construction Norms and Regulations, part 4).
From the decision it is clear that the estimates may include planned savings, direct costs and overheads, which are a mandatory component for further revenue generation in organizations.
The norms of planned savings, as well as administrative expenses of any type have a special place among the general limit of overhead expenses. Also, these components are usually installed separately from others. Consider them in percentage terms. Planned savings - this is something that is necessarily included in the estimate, and they significantly differ from the actual costs, which contain all the costs incurred in the process.
Moreover, various equipment and materials that need to be installed, as well as equipment and inventory that does not need such a procedure, can be indicated as stocks. They are subject to instant payment, which is made from the accounts of capital construction. Moreover, such payments are considered elements of the funds.
Construction organizations set themselves many goals that, one way or another, affect the financial sector. They do their best to do the job efficiently and quickly, or to lower its cost. This will lead to a serious increase in the effectiveness of all capital investments. Workers also try to do their job so that the funds are distributed correctly between all sectors. In the work of construction and installation companies, directly, various banks or finance companies participate, which monitor the correct distribution of all received funds allocated to construction companies to improve the quality of work.
