Cost Estimation in Construction: Getting It Right
Construction contractors can lose a lot of business due to faulty cost estimation; they either estimate too high or too low.
When the estimate is too high, they might lose the project to a competitor. On the other hand, if their estimate is too low, the construction contractors might incur losses. If the estimates are consistently inaccurate, then the company might incur very heavy losses.
A construction estimating software can help you overcome this problem. The appropriate tool for cost estimation in construction allows you to manage every project, according to the client’s specifications and budget.
Here’s How to Pick the Right Software:
- Get software that can integrate with your existing tools. As a construction contractor, you will have software for planning, accounting, bookkeeping, and others. If you have QuickBooks, for example, find a software that will work with the program to avoid inefficiencies and other problems during the life cycle of a project.
- Consider customization features. Every project is different, which means you’ll need full control to make necessary adjustments to every calculation, and every task on every worksheet.
- Think about ease of use. On any given day, you may visit multiple sites — assuming business is good. With multiple projects taking place simultaneously, you’re not likely to have time to study how the estimation software works. Although any new system will require some form of training, it should not prevent you or your employees from productivity. So choose estimation software that is easy to follow and simple to operate.
- Compare features of different software products. Some products will have contract management, customer management, job costing, change orders, and cost database, but not bid management and takeoff capabilities. Other products will offer all features in one system. Make sure you do a comparison of different products to determine the best one for your contracting business.
Cost estimation is tricky, especially in construction. One mistake could mean a loss for your business. Whether it’s losing a valuable project to a competitor or losing money on a construction that has gone over budget, get a reliable tool for estimating costs.