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Will the next estimating mistake be the last?

“How do you check an estimate spreadsheet for errors?”

A good question! I have heard it said that;

About 90% of spreadsheet templates used in construction contain errors; and
An equally high percentage of spreadsheet users are 95 percent confident that their templates do not contain errors.
How scary is that?

Some reasons for not using generic spreadsheet software include the following:

You may seriously underestimate a project due to an overlooked, forgotten, or not properly quantified item.
The “time drain” in building an estimate from scratch, one item at a time is significant, and the need to maintain a number of Excel templates with up-to-date pricing and estimate details for specific types of projects is even more time intensive.
When deleting an individual item from within your generic spreadsheet, you run the risk of an associated formula being lost or worse, no longer calculating properly.
Too many steps or complex processes are involved for slicing and dicing, analyzing, and reporting on your estimate.
Fearing that you were “low bidder” on a job due to miscalculations or worse yet, a missed item.
Answering “Break-Out” questions and requests in the overall bid can be difficult or impossible.
Lack of consistency and historical analysis
A spreadsheet cost estimate template system is not suitable for multi-user environments. By that I mean it needs updated/modified and maintained by one person. If not the risk of errors are increased dramatically.
Time, Money, and Functionality

One advantage of using a generic spreadsheet for your cost estimates is the fact that they’re easy to use and intuitive. Unfortunately, simplicity often times comes hand in hand with limited capabilities.

Most construction-specific solutions provide more growth capacity and sophistication but are perceived as difficult to use. Some of these solutions, however, offer the best of both worlds: an easy to use spreadsheet interface backed by a powerful database for added flexibility and integration with other applications.

A recognizable spreadsheet user interface (UI) means an instant comfort level and a shorter learning curve. And with some systems, the UI can be easily customized for each user and/or use, then easily recalled with only a few simple mouse-clicks.

One of the problems of using a generic spreadsheet for construction estimating is the fact that you have to type each line item in manually, unless of course you’ve created a number of standard templates to use for specific project types. Unfortunately, this approach only multiplies the risks of potential data entry errors, omissions, transposed numbers, and outdated pricing. When using a construction-specific estimating solution, you simply populate your spreadsheet by pulling items or groups of items directly from your database. The database not only stores the items and assemblies but pricing, productivity factors, formulas, and more.

Database power

The thought of building a database can be formidable. But remember, making a database yours doesn’t mean you have to build it from scratch. In fact, there are solutions that support industry-specific, prebuilt databases with a kind of “do it yourself” approach to fine-tuning and further customization.

Most construction-specific solutions provide more growth capacity and sophistication but are perceived as difficult to use. Some of these solutions, however, offer the best of both worlds: an easy to use spreadsheet interface backed by a powerful database for added flexibility and integration with other applications.

Upon estimate completion, many construction-specific solutions help take automation to the next level. Database pricing can be kept current by integrating with pricing services such as RS Means, Trade

Database driven estimating systems have the same features as spreadsheets but are able to incorporate and integrate multiple processes and procedures into a single entry solution. Many contractors are deserting spreadsheets and moving toward database driven estimating systems because they can incorporate more of their internal processes and procedures like lead tracking, proposal writing, project management, scheduling, and job cost accounting into their estimating system. This way they can streamline their business and bring more profit to the bottom line. The database type of approach gives you more flexibility, control, security, easy way to keep historical data for later reference

Another key feature of database estimating systems versus spreadsheets is the ability to manage and track customer and vendor changes. Change orders are treated as a job within a job rather than a complete and separate estimate/spreadsheet. This way you have a complete log of pending, approved and rejected changes for each job. This methodology makes sure you and your customer are constantly aware of their current contract, which alleviates confusion in receiving the final payment.

There are a number of processes and procedures that can be incorporated with estimating that make database driven systems more attractive than spreadsheets. The single largest factor is time, database estimating can produce twice the estimates in a same span of time as spreadsheets. More importantly, with a lot less risk of errors. Production measuring is impossible without the ability to summarize the detailed work tasks to a cost code that can be accurately collected from the field employees. By having everyone on the same system, you will enhance your company’s ability to run more efficiently and everyone in your company will be able to do more with less.

Feel free to comment or leave a question.

Lee Clark
Lee Clark

As the CEO and co-founder of PayCrew, Lee Clark is passionate about the people in the field, because he understands the importance of trust between a company and its people. As a construction business owner, he saw first-hand how attracting and retaining skilled people form the foundation of a company’s success.

Lee has a passion for measuring daily performance in the construction industry and is also a regular contributor at Concrete Construction.