Construction projects are a huge amount of work that requires many different types of expenses. Indirect costs are of great importance, understanding them will help avoid many mistakes.
Indirect costs in construction are not directly related to such factors as building materials or labor involved in the construction process, but these costs are required for stable operations and successful implementation of the construction project. For this purpose, experts recommend using Finoko software, with which you can fully manage construction costs.
Indirect costs are costs for a construction project that are not directly related to any construction tasks. They are intended for full management of the construction process and are of an auxiliary nature.
Types of indirect costs in construction
This expense item can be divided into certain types that provide an assessment of the entire situation as a whole:
- overhead costs. They represent the cost of hiring equipment or servicing equipment owned by the construction company, utilities, renting premises, etc.;
- costs for conditions. These are funds spent on project management: security, monitoring of construction progress, etc.;
- project management costs. They include items such as salaries of managers, engineers, coordinators, and auxiliary labor. This type includes costs for documentary support, security service, etc.;
- indirect labor costs are the salaries of people who are not directly involved in the project, but who support it (accounting, administration, etc.).
Despite the invisibility of these costs, they are one of the items in the general budget.
