Setup and Operation is the collective term for the costs you incur to establish, run and maintain the construction site itself — as opposed to the direct costs of the construction work, i.e. materials and labour hours on the permanent building elements.
In practice, it is “the cost of being on site”: the infrastructure and administration needed to carry out the project, regardless of which specific building elements are being built.
These costs are usually separated into their own group of accounts or production codes, and typically make up 10–15% of the project’s total costs.
What is included
Site setup — establishment
Site fencing, gates and securing the area
Site cabins — office and welfare cabins for the workforce
Cranes, hoists and scaffolding used across the whole site, not tied to one specific trade
Temporary roads, temporary power, water and drainage
Signage and logistics on site
Operations — ongoing
Site management and administrative staff
Cleaning and waste management
Power, heating and fuel during the construction period
Ongoing maintenance of the site setup
HSE costs
In short: Setup and Operation is the fixed overhead of running the construction site. It is charged over time, and it is directly sensitive to how long the project lasts.
Why it is tracked differently
Setup and Operation costs are generally not agreed fixed prices, as is often the case in contract works. They are based on consumption over time, and it is the project management itself that must control and follow up consumption continuously.
Some costs are still fairly predictable because they are tied to fixed rental costs — for example renting site cabins. But even these depend directly on the final construction time: the longer the construction period, the longer the rental period and the higher the total cost.
Period allocation and completing months
To control the costs, you distribute the budget across the months of the project period. This is what is called period allocation.
Once a month is over and has passed, you can choose to complete the month. The planned, period-allocated cost is then replaced by the actual cost incurred in the period.
The final forecast is thus calculated as a combination of:
Actual posted costs in completed periods
Planned, period-allocated costs in periods not yet completed
Expense items
Costs in Setup and Operation are created as expense items. Each account or production code can have one or more, depending on how detailed you want the follow-up to be.
When creating one, you specify:
Production code or account — which account the expense item belongs to
Type — either Setup and Operation for general operating costs, or Staffing plan (Bemanningsplan), where you manage staffing by adding multiple resources per expense item
Period — the time span the cost is distributed over. The project period is set by default, but can be adjusted
Name: AIMZ automatically uses the name of the selected production code, but it can be changed.
Ledger accounts (optional) — which ledger accounts should be matched automatically to the expense item
Cost distribution — the cost is distributed per month. You can choose to spread the remaining budget evenly (1), spread the existing budget evenly (green) or use AI with text (blue). E.g. write: “less at the start, and more towards the end”
There is a setting where you can choose to track only one expense item per account or production code. This simplifies follow-up, since actual incurred costs can then be matched unambiguously to the right expense item — there is only one option to choose from.
Budget and forecast per expense item
Each expense item has a budget that is held fixed. The period-allocated cost reflects this budget at project start, but can deviate as reality departs from what was originally planned.
Important: the budgets of all expense items under an account or production code should together match the budget for that account.
Each expense item gets its own forecast. The sum of the forecasts for all expense items within one account is accumulated and affects the final forecast for the account — and thus the project’s total final forecast.
Note the terminology: we deliberately say “forecast”, not “final forecast”, when talking about a single expense item. This is to avoid confusion with the project’s overall final forecast.
Setting: what should drive the final forecast?
You can choose between two principles:
1. Budget drives the final forecast. The final forecast is set equal to the original budget for the expense item, regardless of how the cost is actually distributed. Even if you adjust the distribution between months or complete months with deviations, the final forecast remains unchanged.
2. Forecast drives the final forecast — the default and recommended choice. The final forecast follows the forecast for the expense item, i.e. the combination of actual posted costs in completed periods and planned costs in the remaining ones. This gives a more dynamic, up-to-date picture as deviations arise.
This setting is essential to understand, because it determines whether the handling of deviations actually affects the final forecast, or whether the final forecast stays locked to the original budget.
Revised budget
Revised budget = original budget + approved Client change orders linked to the expense item.
A revised budget means the project has more money to work with, because extra funds have been added on the revenue side. The revised budget is adjusted only by the cost linked to the relevant Client change order — not by anything else.
Two deviation concepts
1. Deviation from Revised budget — the difference between the final forecast and the revised budget.
Positive deviation: the final forecast is lower than the revised budget. Better than planned — you have money to spare.
Negative deviation: the final forecast is higher than the revised budget. Less profit than originally assumed.
2. Deviation — the accumulated deviation between the period-allocated cost for a given month and what was actually posted, summed across all completed months.
If you cannot find these, you can make them visible by clicking columns.
Handling deviations when completing a month
When you complete a month, there will almost always be a deviation. It is rare to plan the cost accrual for a month with complete accuracy.
You then need to decide how the deviation should be handled:
Approve the deviation — the final forecast changes in line with the difference between planned and actual cost for the month. This requires the “Forecast drives the final forecast” setting to be selected.
Distribute the deviation onwards — if you want to smooth out the deviation so it does not directly affect the final forecast, it can be spread across upcoming months.
First, enter edit mode:
Distribution can be done manually by entering numbers directly in the table, or via predefined options:
Distribute to the next open month
Distribute to the last month
Distribute proportionally across upcoming months
Distribute evenly across upcoming months
