These terms are often confused, but they have distinct meanings in construction management:
| Aspect | Estimation | Costing |
|---|---|---|
| Definition | Predicted project cost | Actual cost incurred |
| Timing | Before project starts | During/After execution |
| Purpose | Planning & budgeting | Control & accounting |
| Accuracy | ±10-15% acceptable | 100% actual figures |
| Source | Rates, standards, experience | Invoices, receipts, records |
Practical Example:
Estimation: Before constructing a house, the contractor estimates the cost at ₹50 lakhs based on current market rates.
Costing: After completion, the actual cost was ₹48 lakhs, recorded from all invoices and payments made.
Variance: 4% favorable (estimated higher than actual)
