Still estimating the old-fashioned way? Pen, paper, and bare-bones spreadsheets still comprise the cost estimating “systems” of the majority of construction firms. Why is this so, when just about everyone uses accounting and project management software applications? We hear lots of excuses, ranging from “I’m the only one who really knows the material and labor costs in my region” to “It’s easier to do it by hand than to learn a new program”. (more…)

Did you end up paying the homeowner to do your last remodeling project? You thought you had applied enough of a markup to be profitable, but realized you actually lost money in the end. It took a lot longer than planned to demo the wall in the kitchen. You forgot that the new hardwood floor would require shoe mold around the cabinets. And the last-minute change order for a tile backsplash upgrade was a total disaster.

Does any of this sound familiar? Hopefully not, but we talk to a lot of remodelers who are encountering these and similar problems. Given the large number of bricks and sticks involved in a typical remodeling job, these issues are understandable and expected when generating bids by hand. Fortunately, many of them can be avoided or entirely eliminated by implementing effective cost estimating software. (more…)

You’ve got a pretty slick cost estimating system. Your estimators generate bids quickly, complete with line item quantities, costs, and even “what-if” scenarios. Accounting upgraded from Quickbooks a few years ago and is running smoothly.

Sounds like a pretty efficient operation, right? Not always. The only way to know for sure is to examine how well the two departments are working together. And if you are still using Quickbooks and generic spreadsheets, the answer is a no-brainer.

Unfortunately, a lot of contractors using “slick” systems still aren’t getting the job done properly. Let’s assume the bid coming from your estimating department looks great. But when it gets passed to accounting, how do they handle all the detail? You have one job cost code for “interior framing”, but your bid contains 14 line items for lumber of different sizes, trusses, joists, and hangers. So what does your accounting department do? Someone probably goes through each line item, figures out its corresponding cost code, consolidates the data, and then manually enters it into the job costing module. The alternative – consolidating all the data on the estimating end before sending it to accounting – is hardly more attractive. (more…)