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Analyzing Costs - Retrospective, Current, or Predictive?

Q. Is the cost analysis to be retrospective, current, or predictive in nature?

You may be performing a cost analysis to report the total costs of on ongoing curation program or project to your funders or organization. Hopefully you have been keeping records of costs all along, based upon your organization's accepted accounting practices. If so, you should be able to gather all the relevant cost information from pre-existing budget and accounting documents. (You would use the budget to determine what cost categories you might want to use, and accounting documents can help provide a "realism check" of your own calculations - you would not want to build a cost analysis purely from pre-existing budget or accounting documents.)  If you need more detail than is provided in available accounting documents you will need to assess the individual categories and calculate their costs based upon your knowledge of the workflow and processes. For example, you can assess how many FTEs you have used, what proportion of their time was spent on particular tasks, and what their salaries have been and calculate human resource costs by cost category. However, ideally you will have proactively considered your need for this information and identified cost categories from the beginning of your venture, in which case you will have had the opportunity to track cost categories and costs on a weekly, monthly, quarterly, or annual basis. If so, you can more easily assess your current costs. 

 

Read

  • Michel, R. Gregory. Cost Analysis and Activity-Based Costing for Government.Chicago: Government Finance Officers Association (GFOA), 2004. Especially, Chapter 9, "Changing the Level of Service" (119-124) and within that chapter, p. 120 on the Cost Behavior Approach and Chapter 4, "Cost Behavior" (39-58).

    This book offers a large number of valuable tips and techniques for estimating and reporting costs in the public sector. It also offers information regarding prospective (i.e., predictive) cost analysis.
  • Venkataraman, Ray R. and Jeffrey K. Pinto. Cost and Value Management in Projects.Hoboken, NJ: John Wiley & Sons, Inc., 2008.

    This textbook offers a great deal of information about cost analysis and Chapters 1-4 are especially helpful for understanding how to determine cost elements and how one can engage in predictive analysis.

Last updated on 08/26/13, 9:26 pm by callee

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