Tracking a construction budget means constantly comparing three amounts: the planned figure (the starting estimate), the committed figure (approved quotes) and the invoiced figure (bills received). Break these three down by trade, follow each quote through to its invoice, and the budget variance stays visible before it ever drifts.
Planned, committed, invoiced: the three levels to track
A construction budget isn't a single number but three readings of the same spend at different stages. Confusing them means flying blind.
Planned
This is the envelope estimated before work begins, usually from the initial pricing or the design stage. It's the reference point: the whole exercise is measuring the gap against this planned figure.
Committed (approved quotes)
As soon as a contractor's quote is approved, the amount is committed: the spend is contractually agreed even though no invoice has arrived yet. This is the level most often overlooked, even though it flags an overrun long before any bill lands.
Invoiced
These are the bills actually received from contractors and subcontractors, due for payment. Invoiced confirms the spend but arrives late: relying on it alone means spotting the overrun too late to act.
Budgeting by trade
A single global budget smooths over drift and hides where the project is overspending. By breaking the envelope down by trade — structure, plumbing, electrics, joinery, painting… — each package carries its own planned, committed and invoiced figures. You can then pinpoint exactly which line is over and by how much, instead of discovering a diffuse overrun at the end of the job.
From quote to invoice: tracking every step
1. Receiving the quote
Each quote received from a contractor is tied to a trade. Comparing several quotes for the same package lets you pick the best value without losing track of the offers you set aside.
2. Approval
Approval turns a quote into a committed amount. This is the key moment: without a clear approval workflow, you no longer know what has actually been agreed, or who agreed it.
3. Invoicing
Contractors' invoices settle the committed amount, in one or several progress claims. Matching each invoice against the approved quote immediately surfaces any discrepancy in amount or any extra work billed.
Monitoring budget variance
Budget variance is the difference between the planned figure and what is committed then invoiced, trade by trade and in total. Tracked continuously, it turns the budget into a decision tool: a negative variance on one package raises the alarm early enough to renegotiate, trade off against another line or adjust the programme, instead of absorbing the final bill.
Common mistakes to avoid
- Tracking only the invoiced amount. Without the committed figure, the overrun shows up too late.
- A global budget with no breakdown by trade: impossible to see where it's drifting.
- A spreadsheet that drifts. Broken formulas, multiple versions, manual entry: the file ends up lying to you.
- Approving quotes with no traceability: you lose track of what's committed and who signed it off.
- Forgetting to match the invoice against the approved quote, and paying for work that was never agreed.
A construction budget isn't controlled at the end of the job — it's steered quote by quote, keeping the variance visible in real time.
Frequently asked questions
What is the difference between planned, committed and invoiced?
Planned is the starting budget, committed is the value of approved quotes (agreed but not yet paid), and invoiced is the bills received. Tracking all three shows the gap between forecast and actual spend.
Why track the budget by trade?
A global budget hides overruns. Broken down by package (structure, plumbing, electrics…), it shows exactly which line is over its envelope so you can react in time.
How do you calculate budget variance?
By comparing the planned figure with the committed and invoiced amounts, trade by trade then in total. A negative variance signals an overrun; tracked continuously, it prevents surprises at the end of the job.