What is a potential consequence of failing to track project costs accurately?

Failing to track project costs accurately can lead to significant project delays and increase the risk of financial issues. Accurate cost tracking is essential for ensuring that a project stays within budget and on schedule. When costs are not monitored closely, it becomes challenging to identify overspending or unexpected expenses in a timely manner, which can result in project overruns. Such overruns may cause delays as teams scramble to find additional funding or make decisions on how to adjust project scope to contain costs. Moreover, financial issues arising from budget mismanagement can lead to strained cash flow, which may jeopardize the continuation of the project and even affect future operations.

Accurate tracking allows project managers to make informed decisions, allocate resources efficiently, and anticipate potential financial challenges. Without this mechanism in place, projects are more susceptible to complications that can compromise their success.