Success in construction is dependent on a number of factors. Among those factors is cost estimation. Cost estimates help ensure the profitability of the project. General contractors, therefore, should make accurate estimates the first time around to save on time.
Cost estimation is no walk in the park and, therefore, requires time and costs money. It can be challenging and expensive when an estimate is expensive but contractors still require the estimates to get material for the project.
Today, general contractors rely on cost estimating software although some contractors still employ the old school ways of construction cost estimation. The estimation software has advantages over the old school methods which make it desirable. For a smaller project, contractors may deem estimation software unnecessary; however, it is imperative for large projects.
With this in mind, it is important to look at construction estimation software, its strengths and why all general contractors, small and big should consider using construction estimation software. Besides the ease and accuracy that comes with estimation software.
Cost Estimation Software
Cost estimation software ensures that estimates are accurate, up-to-date and take less time with the estimation process. Moreover, with cost estimation software, contractors stay up to date with the latest market values which makes estimation seamless.
Other qualities of cost estimation software include:
Accuracy in Cost Estimating
The main advantage of cost estimation software is accuracy. General contractors don’t have to worry about human error when using the software and, therefore, inaccuracies are reduced in the quotes. For a general contractor, an inaccurate estimate can cost them a project since most clients take bids from several contractors before picking the most affordable and efficient.
The secret for general contractors when placing bids is to have competitive pricing. A very high bid will be rejected and a very low bid will raise concerns with clients. The most damning inaccuracies for contractors are inaccuracies with Material Take off than with labour costs.
Take offs are crucial to cost estimation for projects and therefore general contractors should be careful with the estimation process. Takeoffs tend to be inaccurate most of the time because they list materials in bulk and, therefore, it can underestimate the materials or even overestimate the materials required.
Despite the inherent inaccuracy, takeoffs are essential to constructing a competitive bid that tramps over the competition. The inaccuracies in estimation mainly stem from drafting estimates that don’t align with market values.
Manual take offs are often inaccurate due to oversights and sometimes incorrect incorporation of parameters from the drawings. The detail is everything when it comes to construction cost estimation and general contractors cannot afford to overlook even the smallest design details on a blueprint.
With construction cost estimating software, many of the challenges of manual estimation are addressed. The software reduces human error and coupled with digital take off, the accuracy margin is better. Secondly, estimation software can project different costs for materials. Moreover, the software can help the contractor build a database for commonly used materials and their estimates in line with market value. However, general contractors must constantly update these databases.
Having a database with estimates for commonly used materials saves the general contractor time. Instead of spending time contacting suppliers, they can get estimates from the database and cut down the time it would take to manually estimate material costs.
Doing math by hand takes time, time that could cost a general contractor important projects. Therefore, to save on time that an estimator would spend making estimates manually, construction estimation software helps speed up the process.
In earlier versions of the contractor estimating software, speed was not one of the advantages since it took almost the same time as doing it by hand. However, advances in technology have seen that estimating software is faster and more reliable and therefore increases profitability for contractors.
Cost estimating today can incorporate various aspects of construction data and also features an easy to use user interface. General contractors don’t need to learn to code or be a computer whizz to use the program. What the software does is bring together all relevant information for a construction project including takeoffs and markups.
Scattered information can be painstaking for general contractors and with construction software that consolidates all information, the process is easier. Estimates can be produced faster with information in one place. With a program that is capable of creating estimates from start to finish, general contractors are now more efficient.
The first step is loading all the information about the project into the estimating software. The software allows general contractors to customize the display of data on the program and that makes it easier to hide data that is no longer relevant to the process and show relevant data.
Consolidated information helps general contractors place more bids since they are more efficient and this increases their chances of winning bids and getting to work on construction projects.
Uploading data onto the software is half of the process and the other half is making sense of the data. In the past, general contractors could load all the information from a project into excel sheets, however, that didn’t make the manual estimation more efficient and accurate.
To improve productivity, it is essential to render the data loaded as readable and presentable to improve workflow and efficiency. Data sorting is not an easy process when done manually. Contractors spend hours combing through data sources. However, construction estimating software helps speed up the process. A general contractor estimating software ensures data is sorted in the best way possible to make the process seamless.
Some contractor estimating software has the ability to perform digital takeoffs. Digital takeoffs are more efficient than manual takeoffs because they cut down on the time it takes an estimator to complete a takeoff.
Another advantage of a digital takeoff is the direct generation from the blueprints. As a result, the strenuous process of manual takeoff generation is eliminated. As a matter of fact, digital takeoffs can reduce the time it takes by up to half.
General contractors, however, need to keep in mind that not all contractor estimating software has built-in digital takeoff capabilities. For such programs, estimators have to juggle two programs to consolidate the takeoff information with the cost estimation data.
With that in mind, a software platform that has built-in digital takeoff capabilities is more efficient and desirable.
Bid day analysis
Rapidly comparing bids from subcontractors can immensely help general contractors in their estimate process. The availability of this feature in contractor estimating software enables general contractors to carry out a bid-day analysis of subcontractors and make selecting a bid easier.
Quickly comparing bids from subcontractors and groups of subcontractors makes contractors more effective. Estimating software allows contractors to group and compare bids from different categories of subcontractors.
Every project that a general contractor secures should have enough margin to maintain profits and growth. Adding markups takes time that general contractors could spend elsewhere. Contractor estimating software makes the process of adding markups easier and faster.
In some estimating software, markups for profit and overhead are calculated automatically which leaves the contractor with time to work on the estimates. Instead of taking time to determine whether a bid is profitable, the program does the work for you.
Moreover, the program enables contractors to determine whether the bid is falling under the budget at any point in the estimation process. With contractor estimating software, the markup process is more intuitive, accurate and faster.
Reporting functions in cost estimating software is a great advantage for general contractors. This function assists contractors inefficiently in producing customized reports. The reporting feature of estimating software gives contractors an edge over their competition.
First, built-in reporting functions in a cost estimating program saves time. You can run reports directly from your cost estimating program which removes the need for juggling multiple programs. Moreover, reporting capabilities reduce delays and save money and time.
Using one program for all the estimation also helps reduce inaccuracies that several programs could cause. Transferring data from one program to another can cause errors that make the estimates inaccurate.
For general contractors, the ability to compile all the data you need for an estimate in a central database is imperative. It is even more advantageous if the program allows reporting. With all the data from a central place, contractors can create a variety of reports without losing data, having inconsistencies, or going through the tedious manual process.
A general contractor, using cost estimating software can get a detailed analysis of their cost estimates while at the same time producing a material list for vendors and a report of the takeoff.
To Sum Up
Cost estimating software streamlines the process of formulating construction cost estimates and helps general contractors produce competitive estimates. The power of the cost estimating software lies in the speed and accuracy of producing estimations.
Each of the functions of cost estimating software is essential. However, the true capabilities of the program are realized when all the functions are used together as a comprehensive tool. The reporting capabilities of estimating software relate directly to its ability to produce accurate and competitive estimates.
The user interface of estimating software is easy to familiarize with and therefore general contractors can customize views of the data entered into the program. When all the features come together, you can easily generate detailed estimates in less than half the time it takes to conduct manual estimates.
All in all, contractor estimating software is an excellent aid for contractors which makes bids more profitable and helps you secure more projects. It is, however, important to note that cost estimating software does not negate the importance of skill, expertise, and experience.