Study On Recessive Project Cost Control For Construction Enterprise

In recent years, some large-scale construction enterprises have strengthened project cost management continuously, expanded operation scales and raised enterprise profits. The output value of the branch companies of the large-scale construction enterprises have increased year by year and the profits have risen sharply. The output value of some of the branch companies increased from a few hundred millions to a few billions. However, in a day of severe competition in construction market, the produce scale for construction enterprises have expanded, but the profits haven't changed. Even some of them have been trapped into a vicious loss cycle of "more work, more loss". It seems that the situation of vicious cycle of "Cost decreases difficultly, profits gain difficultly and loss is difficult to stop" cannot be stopped.It is always a difficult problem how to cut down cost and gain more profits by low cost, which troubles state-owned enterprises. The project cost falls into obvious cost and recessive project cost in the paper. We propose that recessive project cost conceals in the total enterprise cost and does not be supervised by finance and audit. The recessive project cost produced unintentionally or on purpose by enterprises or staffs is called recessive future cost and recessive transferring cost. It is the total of the future tense and transferring cost state. Compared with obvious cost, recessive project cost is more concealed, difficult to avoid, uneasily to quantify.In this paper, we use the method of qualitative combining quantitative, put forward a solution plan and specific control on construction enterprises how to control recessive project cost effectively. Firstly, it demonstrates the problems in the control of project recessive cost in the respect of the concept and classifications of project recessive cost and its harm and influence on enterprises .It's a tough challenge for cost control in enterprises. Through the case of failure project management of China Railway A Group, we analyzed danger and outcome in recessive cost. Secondly, we study on the project budget management, internal control system, organization structure and danger management, catch up with the ideas of "Preventing recessive cost, strengthening project budget management" "Establishing sound and performing project internal control system effectively is the foundation of recessive cost control.", "Scientific project structure organization flattened is the method of controlling recessive cost effectively and organization security.", "Strengthening construction project risk control and prevention makes recessive cost minimize.". Finally, through successful case of controlling project recessive cost of China Railway A Group Corporation Ltd, we have summarized the total solution plan for recessive cost control. Furthermore, it provides a new thinking for enterprises controlling recessive cost effectively, gaining more profits, realizing rapid developmet.