Project Cost is something that every Project Manager needs to plan and track rigorously.
During the lifecycle of a project, Project Cost can be represented through the following metrics:
Planned Project Cost
The expected total cost of the project at the very beginning of the project. Ideally, this metric should not change as the project progresses. Often Planned Project Cost is referred to as Project Budget.
Actual Project Cost
The real-time total of the projects actual labor costs and expenses once the project has started. This metric begins from zero and changes every day. Ideally, on the last day of the project, the Actual Project Cost should be equal or lower to the Planned Project Cost. If you manage to keep it this way, well done!
Estimate to Complete (ETC) Project Cost
The real-time summary of the remaining estimated labor cost and planned expenses – what is left to complete the project.
Estimate at Completion (EAC) Project Cost
The real-time summary of the Actual Project Cost plus ETC Project Cost. Ideally, the EAC Project Cost would be equal to the Planned Project Cost. However, to paraphrase Helmuth von Moltke, the Elder, no project plan survives the first contact with reality. For example, if you added an unanticipated expense/change request, or a specific task ends up taking more time than initially planned, your EAC Project Cost will increase.