In the fit-out and interior contracting industry, keeping costs under control is one of the biggest challenges. Materials, labor, subcontractors, and overheads – if not properly monitored – can easily push a project over budget.
Cost overruns not only reduce your profits but can also harm client trust and delay project delivery. That’s why fit-out companies need clear processes and reliable tools to track expenses at every stage of the project.
In this article, we’ll discuss the common reasons why project costs go out of hand and share practical ways to manage them effectively.
ERPNext is a well-suited open-source ERP system made for businesses at any scale. It includes features that can help you optimize your supply chain including:
Material costs often change due to market conditions, supplier delays, or design changes. If you’re not tracking these changes closely, your overall budget can take a big hit.
Clients sometimes request changes or additions after the project starts. Without proper approvals and cost adjustments, these changes can lead to unexpected expenses.
Poor planning or delays in work can result in high overtime costs and wasted hours on site.
Subcontractors may charge more than expected due to delays or additional work. Without strict cost tracking, these overruns can go unnoticed until it’s too late.
When different teams (procurement, site, accounts) work in isolation, it’s hard to see the total project cost in real time.
The first step to control costs is to get your estimates right:
Use Pre-Priced Items: Base your estimates on updated material and labor rates to avoid underpricing.
Prepare a Detailed BOQ: A Bill of Quantities ensures you know exactly what is needed and reduces guesswork.
Add a Contingency Budget: Always keep a buffer for unexpected costs.
Tracking costs in real time helps you avoid surprises later. Modern ERP software designed for fit-out companies allows you to:
📊 Monitor Actual vs Estimated Costs: Spot any gaps early and take action.
🚨 Set Alerts for Budget Limits: Get notified when costs are nearing the approved budget.
📝 Generate Cost Reports: Get clear, up-to-date information for better decision-making.
Material wastage is one of the biggest areas of loss in fit-out projects. Here’s how to manage it:
📦 Track Material Usage in Real Time: Prevent shortages and overstocking.
🛒 Plan Purchases Carefully: Order only what is required to avoid tying up cash in unused stock.
♻️ Identify and Reduce Waste: Monitor leftover materials and look for ways to reuse them in future projects.
Labor is a major expense in any project. Keep it under control by:
⏱️ Tracking Labor Hours: Monitor attendance and productivity daily.
📋 Allocating Tasks Properly: Match workers to jobs based on skills and availability to reduce delays.
🚫 Controlling Overtime: Spot and address unproductive time before it increases costs.
✅ Tracking Progress Against Contracts: Pay only for work completed as per agreed terms.
📑 Verifying Invoices: Make sure invoices match the work done and materials supplied.
📈 Negotiating Better Rates: Use data from past projects to get fair pricing for future work.
ERP software brings all your project data into one system. This means:
✅ You get a complete view of costs across materials, labor, and subcontractors.
✅ You can monitor budgets in real time and act fast if costs rise.
✅ Reports and dashboards make it easy to make informed decisions.
For example, Designsmith, a leading fit-out firm, reduced their project costs by 10% after adopting ERP. Similarly, Italco Interiors cut material wastage by 15% through better tracking and procurement planning.
Cost control is essential for the success of any fit-out project. By using accurate estimation, tracking expenses in real time, and improving collaboration between teams, you can protect your profits and deliver projects on time.
Investing in the right tools, like an ERP system built for fit-out companies, makes this process even more efficient and helps you stay competitive in the market.
