Committed cost is money your business is contractually obliged to spend, whether or not an invoice has arrived: every purchase order raised with a supplier, every subcontract order placed, every hire agreement signed. The invoice may be weeks away; the obligation exists the moment the order goes out.
It sits between two figures people watch more often: the budget (what the job should cost) and actual cost (what has hit the ledger). Both are honest, but committed cost is earlier — and on a fast-moving job, earlier is everything.
Why it matters
Actual cost tells you about the past; committed cost tells you about the near future. If a job has a £120,000 budget for its ceilings package and the orders raised against it already total £131,000, that job is £11,000 worse than plan today — even though the ledger may still show it comfortably under budget. Contractors who reconcile only against actuals are always four to six weeks behind the truth, which is usually exactly the window in which something could have been done.
How it goes wrong
Committed cost fails when orders don't create commitments visibly: POs raised informally by phone, orders in a drawer awaiting "proper" processing, subcontract instructions given on site and papered later. Each gap means the job's committed figure understates reality — and the reconciliation that relies on it inherits the blind spot.
In Vyntworks, every purchase and subcontract order commits cost against the job's budget the moment it is raised — with sign-off by value band so raising it properly is the easy path — and live CVR reads budget, committed, actual and valued side by side. Related: what is CVR and PO sign-off without the bottleneck.