What is a Cost Management Plan?

A cost management plan is a critical component of project planning. It ensures that costs are estimated, allocated, and controlled within budget and quality standards. Levels of precision, units of measurement, control thresholds, rules of performance measurement, and reporting formats are key aspects of a cost management plan. Project managers must be prepared to accurately and specifically respond to questions about cost management planning, as well as develop a cost approximation early on in the project lifecycle for successful project delivery.