Establish the cost basis
Establish the cost basis and connect the estimate to the agreed scope and budget.
Project Cost & Risk ControlKnow the financial position.
Know the financial position.
See the decisions ahead.
Project financial management, forecasting and change control grounded in the actual condition of the work.
Sand Hill works with owners and contractors to establish a credible financial outlook for the work and commitments they manage. We connect scope, contractual responsibilities, progress and remaining work with the cost exposure and decisions relevant to each engagement.
PROJECT FINANCIAL MANAGEMENTA financial outlook grounded
A financial outlook grounded
in the work remaining.
Recorded expenditure tells part of the story. The client also needs to understand purchasing commitments, accomplished work, the cost to finish and the consequences of changing conditions.
Sand Hill connects those views so the budget, forecast, risk exposure and scope decisions support a coherent understanding of the investment.
WHEN TO ENGAGE SAND HILLBring the position
Bring the position
into focus.
- You are developing a project and need to establish the cost basis, financial controls and forecasting requirements before significant commitments.
- The reported budget position does not explain the expected final cost.
- Purchasing, accounting, progress and change information tell different parts of the story.
- Your organization needs an independent view of exposure before the next commitment.
WHAT WE DO
Reconcile financial and progress records
Reconcile commitments, costs incurred, recorded expenditure and verified progress so the forecast accounts for incurred costs and remaining work without omissions or double counting.
Forecast the cost to finish
Develop and maintain forecasts for remaining work and expected total project cost.
Assess changing exposure
Assess cost, schedule, technical and commercial exposure as project conditions evolve.
Assess owner scope changes, cost trends and contractor changes
Distinguish owner scope decisions, emerging cost trends and contractor changes. Assess their separate and combined implications for the forecast and required client decisions.
Investigate the drivers of cost and forecast changes
Investigate the underlying causes of cost and forecast changes, then assess what those findings mean for the remaining work and expected final cost. Make the evidence, assumptions and unresolved uncertainty clear for client decisions.
WHAT YOU RECEIVE
A clear investment basis
An estimate and budget connected to the scope the owner has chosen.
A current cost outlook
A reconciled view of commitments, costs incurred, recorded expenditure and forecast remaining costs, including expected final cost and the significant assumptions and uncertainties affecting that forecast.
Visible exposure and change
An understandable account of risks, proposed changes and approved commitments.
Decision-focused reporting
Findings on the causes of significant cost and forecast changes, with clear explanations and intuitive graphics showing the evidence, remaining uncertainty and implications for expected final cost and client decisions.
CONNECTED CONTROLA continuous cycle
A continuous cycle
of understanding and action.
Select a part of the financial-control cycle to explore its contribution. Each connection supports a clearer client decision.
A clear basis for the investment.
Connect the agreed scope, estimate and authorized budget so the owner understands the starting commitment.
The budget remains the reference while the forecast reflects changing conditions.
The current financial position.
Consider purchasing commitments, recorded expenditure and accomplished work within a consistent view of execution.
Progress and commitments inform the remaining obligation and expected final cost.
The financial commitment ahead.
Assess the cost of the remaining work in light of the execution plan, current conditions and unresolved requirements.
Changes in the work and its conditions can alter the forecast before the expenditure appears.
The consequences that warrant attention.
Consider financial exposure alongside schedule, technical performance and operating readiness.
Uncertainty informs the forecast and the owner’s choices about the next commitment.
The investment the owner chooses.
Distinguish owner scope decisions, emerging cost trends and contractor changes. Assess their separate and combined implications for the forecast and required owner decisions.
Approved decisions update the relevant scope, budget or commercial records. Unresolved exposure remains visible in the forecast.
Understanding that leads to action.
Investigate the causes of significant forecast changes. Explain their implications for expected final cost and owner decisions, distinguishing evidence from assumptions and unresolved uncertainty.
Decisions change the work; the financial outlook is then reviewed against the revised conditions.
Commitments and progress inform the forecast. Risk and change affect the outlook. Owner decisions shape the work and the next assessment.
ILLUSTRATIVE PROJECT EXAMPLE
Cost outlook and budget position.
Total budget $550.0m
Includes $50.0m contingency
Includes $50.0m contingency
Period 1 marks the full project fund date. Pre-commitment spending had already been estimated and tracked before that date and is included in the total project cost shown.
Estimated risk-adjusted project costHigh-range projectionBaseline + realized adjustmentsOriginal baseline ($500.0m)Total budget including contingency ($550.0m)
Illustrative $ millions
Scroll horizontally to view the full chart.
Baseline + realized adjustments$548.8m$1.2m below total budget (0.2%)
Cumulative realized adjustments$48.8mAgainst $50.0m contingency
Estimated risk-adjusted project cost$548.8mReporting period 31
High-range projection$548.8mReporting period 31
Financial closeout at period 31: $548.8m. Select an earlier period to compare its estimate with the closeout result.
Illustrative values based on Sand Hill project experience, adjusted to protect confidentiality. All amounts are shown in millions of dollars.
Understand the series and comparisons
The original baseline of $500.0m excludes contingency. The total budget is $550.0m, including $50.0m of contingency. The realized-adjustments line adds each period's cumulative adjustments to the original baseline. Each adjustment amount is cumulative; the amounts should not be added across periods. The line describes the cost position and does not represent expenditure incurred to date.
Budget position compares the baseline plus cumulative realized adjustments with the total budget, including contingency. The financial closeout position at period 31 is $548.8m, $1.2m below the total budget (0.2%). The final cumulative adjustments of $48.8m are measured against the original $50.0m contingency allowance.
The estimated risk-adjusted project cost represents the expected final project cost with assessed risk reflected in the estimate. The high-range projection expresses a higher cost outlook; no statistical confidence level is assigned. These forecasts may indicate exposure above the total budget even when realized adjustments remain within the contingency allowance.
Forecast accuracy is a separate comparison. Each period's estimate is compared retrospectively with the final baseline plus cumulative realized adjustments of $548.8m at financial closeout in period 31. Percentage differences use the selected estimate as the denominator. The closeout position was not known during the earlier reporting periods. Agreement of all three series at closeout is the resolved result, not a forecast made in advance.
Production start-up is marked at period 23 and financial closeout at period 31. Production began while financial obligations remained unresolved. Assessed liabilities included in the risk-adjusted forecast had not yet appeared in period 23’s realized adjustments.
The horizontal axis follows reporting periods from full project funding through financial closeout. Changes in a projection should be interpreted with the underlying scope and execution conditions.
View the example data
| Period | Estimated risk-adjusted project cost | High-range projection | Cumulative realized adjustments | Baseline + realized adjustments | Total budget including contingency | Budget remaining |
|---|---|---|---|---|---|---|
| 1 | 551.5 | 614.1 | 12.3 | 512.3 | 550.0 | 37.8 |
| 2 | 556.6 | 613.2 | 15.6 | 515.5 | 550.0 | 34.5 |
| 3 | 531.0 | 582.3 | 13.0 | 513.0 | 550.0 | 37.0 |
| 4 | 530.2 | 582.4 | 13.2 | 513.2 | 550.0 | 36.8 |
| 5 | 531.3 | 575.6 | 9.4 | 509.4 | 550.0 | 40.6 |
| 6 | 527.5 | 561.5 | 8.1 | 508.1 | 550.0 | 41.9 |
| 7 | 531.5 | 565.4 | 8.2 | 508.1 | 550.0 | 41.9 |
| 8 | 531.3 | 564.3 | 5.2 | 505.1 | 550.0 | 44.9 |
| 9 | 528.9 | 560.9 | 4.5 | 504.6 | 550.0 | 45.4 |
| 10 | 529.0 | 560.5 | 3.5 | 503.6 | 550.0 | 46.4 |
| 11 | 530.9 | 551.9 | 5.0 | 505.0 | 550.0 | 45.0 |
| 12 | 531.9 | 550.0 | 5.5 | 505.5 | 550.0 | 44.5 |
| 13 | 531.6 | 550.7 | 5.7 | 505.6 | 550.0 | 44.4 |
| 14 | 532.5 | 552.0 | 5.6 | 505.6 | 550.0 | 44.4 |
| 15 | 532.5 | 549.9 | 5.9 | 505.9 | 550.0 | 44.1 |
| 16 | 532.5 | 549.8 | 6.2 | 506.1 | 550.0 | 43.9 |
| 17 | 530.8 | 546.0 | 7.6 | 507.6 | 550.0 | 42.4 |
| 18 | 534.7 | 548.1 | 7.8 | 507.8 | 550.0 | 42.2 |
| 19 | 536.3 | 549.0 | 8.3 | 508.3 | 550.0 | 41.8 |
| 20 | 538.5 | 547.3 | 20.1 | 520.1 | 550.0 | 29.9 |
| 21 | 539.9 | 549.8 | 29.9 | 529.9 | 550.0 | 20.1 |
| 22 | 540.5 | 549.5 | 30.0 | 530.0 | 550.0 | 20.0 |
| 23 | 542.1 | 548.5 | 28.6 | 528.5 | 550.0 | 21.5 |
| 24 | 546.4 | 575.2 | 35.0 | 535.0 | 550.0 | 15.0 |
| 25 | 546.2 | 572.8 | 38.3 | 538.3 | 550.0 | 11.8 |
| 26 | 546.1 | 568.2 | 41.3 | 541.3 | 550.0 | 8.7 |
| 27 | 546.3 | 567.1 | 41.5 | 541.5 | 550.0 | 8.5 |
| 28 | 547.4 | 562.9 | 43.4 | 543.4 | 550.0 | 6.6 |
| 29 | 547.7 | 565.5 | 43.1 | 543.1 | 550.0 | 6.9 |
| 30 | 548.0 | 562.8 | 43.9 | 543.9 | 550.0 | 6.1 |
| 31 | 548.8 | 548.8 | 48.8 | 548.8 | 550.0 | 1.2 |
THE OWNER'S PERSPECTIVE
Understand exposure early. Evaluate forecasts against results.
Production began in month 23 after the full project fund date. Production start-up did not mean that the project was complete or that all financial obligations had been resolved. Sand Hill’s risk-adjusted forecast included assessed liabilities that had not yet appeared in period 23’s realized adjustments. As outstanding changes and obligations were resolved through period 31, the realized position approached the earlier forecasts. Liquidated damages were assessed where due, contracts closed, and final change orders negotiated.
The chart distinguishes position against the total budget, including contingency, from the accuracy of earlier forecasts against the financial closeout result.
Read the Cost-to-Finish InsightA few useful questions.
Can you assess a project already underway?
Yes. We assess the financial position, remaining work and uncertainty affecting expected final cost. Where continued involvement is needed, we can establish or strengthen cost controls, maintain forecasts and investigate emerging exposure as execution progresses.
How does this connect to scheduling?
Time, work sequence, productivity and shared resources influence the cost to finish. Financial and schedule forecasts should reflect a consistent understanding of execution.
How are owner scope changes treated?
Approved changes should remain visible so the owner can distinguish a deliberate change in investment from variation in delivering the agreed scope.
Does reporting guarantee a particular result?
The purpose is to improve understanding and support timely client decisions. Outcomes also depend on the work, external conditions and the actions of the organizations responsible for delivery.
EXPERIENCE IN PRACTICE
Explore All Experience See the contribution.
RecoveryWithin 1%of Sand Hill’s initial cost re-estimate
Bringing 19 project scopes into one coordinated program
Explore this Experience RecoveryCredible cost to completeCompleted by the replacement contractor within the revised budget.Establishing a credible path to complete a boiler project
Explore this Experience DevelopmentUp to US$2.2Bindividual project development budgets across engagements, measured as total installed costGreenfield Development & Delivery
Explore this ExperienceHow confident are you in the cost to finish?
Discuss the current position, the remaining commitment and the decisions ahead.