A cost overrun is the amount by which a project’s actual cost exceeds its approved budget, measured as actual cost minus budget, and often shown as a percentage of the budget.
Overrun % = (actual cost − budget) ÷ budget × 100. A project budgeted at ₹40,00,000 that has cost ₹42,40,000 is ₹2,40,000 over, a 6% overrun.
Common causes are design changes after work starts, under-measured quantities in the BOQ, rate increases, rework and delays, and bills that are recorded late so that spend is not seen until it is too late to act.
The cheapest overrun to manage is the one you see early. That means comparing spend with budget as bills arrive, not at month-end.
Illustrative: budget ₹40,00,000; spent to date ₹42,40,000. Overrun = ₹2,40,000, which is 6% of budget.
Budget vs actual updates as each bill is entered, and ARC PEM raises overrun alerts and shows them in notifications, so a project that crosses its budget is flagged that day. See all features.
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