Construction Financial Glossary

Cost Breakdown Structure (CBS) Definition

A cost breakdown structure (CBS) is a detailed framework that categorizes all costs associated with a construction project. It helps in budget planning, cost tracking, and financial reporting by breaking expenses into hierarchical levels.

How a CBS Improves Cost Control

By organizing costs into defined categories, a CBS ensures better financial oversight and allows project managers to track expenses against budgeted amounts. It also helps identify potential overruns early.

Key Components of a CBS



Related Terms: Work Breakdown Structure (WBS), Job Costing, Construction Budgeting, Earned Value Management (EVM)

FAQs

How does a CBS differ from a WBS?

A: A CBS focuses on costs, while a WBS organizes project tasks and deliverables.

Why is a CBS important for financial management?

A: It provides transparency, improves budget tracking, and ensures better financial decision-making.

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