What is this?

A Committed Cost is the obligation to pay a good or service at any future time. Good practice is to treat all agreements for goods and services (even verbal) as committed costs as the work is performed. Examples of committed costs are:

  • A verbal Purchase Order to purchase an item
  • A service provider expends time on your project that he intends to invoice for at some future time.
  • A formal Purchase Order is issued for a piece of equipment for a project.
  • An engineering firm spends hours working on a detailed cost estimate.


Accountants expect Committed Costs to be accrued for either monthly or quarterly and most definitely annually. Committed Costs are to be accrued for in the month that the “work” is performed. Please note Committed Costs are in advance of an invoice being issued or paid.


BOSSES HATE SURPRISES!! How do you think your boss would view your performance if you could provide him each day with the information  as shown below:


Operating CompanyTypeAFE#LocationAFE Budget($)Current Estimate($)Variance Current Estimate to Original Budget($)Total Committed($)Variance Total Committed to Current Estimate($)
Star Telecommunications Tower 115D12352 101/02-24-025-26W4/02 $820,000 $930,000 ($110,000) $420,000 $510,000
Star Telecommunications Tower 116W21356 121/06-36-052-45W2/01 $25,000 $32,000 ($7,000) $23,000 $9,000
Star Telecommunications Tower 115F21355 100/02-24-062-15W6/04 $250,000 $240,000 $10,000 $200,000 $40,000
Venus Media Receiver 116C32654 131/05-10-020-10W5/01 $1,000,000 $1,200,000 ($200,000) $1,000,000 $200,000
Venus Media Receiver 116W21365 100/02-12-010-10W1/00 $30,000 $25,000 $5,000 $22,000 $3,000
Venus Media Receiver 115F65845 100/06-36-052-24W5/00 $1,500,000 $1,750,000 ($250,000) $300,000 $1,450,000
Saturn Satellite Inc. Transformer 116D65897 01/05-21-012-14W2/00 $5,500,000 $4,300,000 $1,200,000 $100,000 $4,200,000
Saturn Satellite Inc. Transformer 115C98754 100/01-02-012-30W2/00 $500,090 $400,030 $100,060 $240,000 $160,030

How does it work?

  • Pay $14.95(USD) for each project day.
  • No other costs, no software to install, no IT people to involve.
  • Software-as-a-Service (saas) is the model.
  • Fund your CommittedCost Software Account and start today. The balance will drop with each submitted Daily Report. You will be warned when to replenish your CommittedCost Software Account once balance falls below $200.
  • Bill the service to your project.
  • For a small fee we will set up your AFE templates, your Cost Center Templates (Op-Ex) and even set up your AFE’s (Budgets). You will be up and running within hours.

Send us your AFE Templates, Cost Centre Templates, AFE Budgets, OP Ex Budgets for input today! You will be using the system within 24 hours! (Click Here)


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