Every big construction project begins with the bidding process, and the most crucial part of putting together a bid is cost estimation. In the last ten years, contractors have increasingly relied on a construction estimating Excel spreadsheet to record and delineate all the data that goes into coming up with a number that a client will find appealing. Before the bid can be made, construction management professionals need to know every type and quantity of material and human resources they will need to bring the project to fruition on time and under budget.
The potential profitability of a completed project depends on budgetary accuracy in order to prevent cost overruns and unexpected expenses throughout the life of a construction process. While Excel spreadsheets have long been an industry standard, they do come with certain shortcomings that can result in costly mistakes, delays, and even lost revenue.
To improve your cost estimation process and ensure a larger profit margin, you may need to say goodbye to the spreadsheet and the common errors that it can cause during cost estimation.
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Construction cost estimation is an essential process of coming up with accurate and transparent information on the expenditures and budget of a construction project. One way you can calculate cost estimations is through excel spreadsheets. Follow the guidelines below before crafting your construction estimating excel spreadsheet.
Any construction management professional is familiar with the things that need to be accomplished during cost estimation and knows that it goes far beyond crunching the numbers. It requires late nights over the drafting table, long meetings during the day, and rolling up your sleeves to do several miscellaneous tasks whenever you can squeeze in the time.
While the Excel spreadsheet may be the final destination of all the information gathered during this grueling process, you can reduce manual processes with the help of automation software. For example, software that allows you to quickly shift between different digitized views of documents will save you hours of shuffling between blueprints, post-it notes, and reams of paper that any bid is bound to generate.
Data entry is one of the most unforgiving aspects of the construction bid process and where most of your errors will be recorded purely out of human error. If you are using a construction estimating excel spreadsheet, there are bound to be rounding errors, keystroke mistakes, autocorrect slip-ups, and other things that can go wrong by virtue of the design of the spreadsheet software. Simply put, Excel is a program that is designed for the lowest common denominator of business use and is in no way customized to the specific needs of construction management professionals.
Having a program built for the type of information, documentation, and data sets that are important to the bidding process means that you will be able to close your business day with the confidence that every keystroke has been one step closer to an accurate bid.
The bidding process isn’t just about recording and gathering data, but interpreting and analyzing it as well. You may also need to make connections between data points that may seem discrete but will have a significant impact on each other. For example, one team may have discovered a supplier that can provide materials at a lower cost, but your logistical infrastructure may accrue the difference in costs or even require more funds for transportation and storage, throwing your bid into chaos.
Keeping your data in a centralized hub where it can be combined and integrated to account for these factors can go a long way toward populating a project budget that reflects the reality on the ground.
Reporting is one of the toughest and most underappreciated aspects of the process, and the truth is that your construction estimating Excel spreadsheet offers few features that make it any easier. This labor-intensive step can be aided by moving the reporting requirements to a cloud-based platform, where everyone on the team can submit their reports even when they are on the move or using mobile devices to make reports on the fly.
The ultimate goal of all those meetings, data gathering, data integration, and reporting is to finally produce a takeoff utilizing everything that you have worked on. Going paperless during this step in the project is greatly beneficial because it can speed up the process and even make necessary last-minute adjustments painless. It also saves you time that can be better spent polishing your presentation.
You deserve better than the scant assistance that a construction estimating Excel spreadsheet is capable of providing when you are coming up with a bid on a crucial project. Any mistake made along the way can drastically cut into your profits in the pre-construction phase. Fortunately, ProEst software provides a full suite of features that can help you at every step of the cost estimation process. You can ditch the spreadsheet today and never look back.
Understanding your project scope will help you plan your project budget. After evaluating your project, come up with a list of everything you will need to finish your construction successfully. Make sure that the plans discussed involve other stakeholders to increase the reliability of your project costs.
After evaluating your construction project, organize your data in detail to make inputting data easier. Then, countercheck the accuracy of all information presented before manually adding it to your spreadsheet.
Excel spreadsheets have columns and rows where organized data is added. Clearly show the contents needed, quantity, units, and the total cost estimate before starting your construction.
Make sure to present your project details in your spreadsheet, such as project title, time frame, project description, contact information, etc. This makes it easier for anyone with an excel spreadsheet to read and interpret data fast.
The final step is presenting final cost estimates to your client and other stakeholders. Make copies of the spreadsheet before sharing it as a file with your team.
Choosing the right tools for cost estimation will speed up collecting data, inputting formulas, and arranging them. Although estimating excel spreadsheets are popular, there may be better calculation techniques. Below are reasons why you should avoid calculating cost estimates using excel spreadsheets;
Excel spreadsheets can be overwhelming since they use formulas to calculate cost estimates. These formulas need to be constantly updated, and the knowledge of the function for each calculation is necessary. However, the total estimate will be accurate if the procedure is correct.
Access to information is essential to all stakeholders. For example, excel spreadsheet calculations can be shared, but only one user at a time can change data.
Excel spreadsheets are time-consuming and highly prone to human error. Calculations in Excel are inputted as formulas that always need to be counterchecked. Wrong data in just one cell can throw the entire estimate off balance.
Excel spreadsheets lack security measures hence anyone can access sensitive company information. Since data is manually inputted, there is room for data mismanagement and corruption. With the increase in cyber hacking, companies should choose safer data calculation methods to safeguard their financial details.
Changes in construction projects happen fast, and excel spreadsheets fail to keep up, especially when handling large construction projects. Excel spreadsheets don’t accommodate company growth as they are designed mainly for smaller construction jobs. In addition, this system can’t combine with other systems’ accounting making it difficult to combine data for accuracy.
When spreadsheet documents are shared and edited, it is difficult to know who has the latest accurate version. In addition, when using excel, one can’t access past data to use as a reference.
Data sets from excel spreadsheets can only be shared in real-time with multiple users using google sheets. Therefore, when calculations are done in excel, they risk running out of date, making it hard to estimate an accurate cost.
Construction estimating excel spreadsheet is a method of calculating raw materials, expenditures, and other resources required to complete a project. Using Microsoft Excel, this spreadsheet helps stakeholders weigh a project’s feasibility before construction begins.
Project owners can use this construction estimate technique to find the best bid, general building contractors to create competitive bids, and construction project managers and companies during the cost estimation and bidding process.
The costs you should include in your spreadsheet are;
If you are looking for an accessible way to calculate the approximate cost of a construction project, then excel spreadsheets work just fine.
Although discouraged in larger construction projects for their time-consuming nature, cost estimating with excel spreadsheets can still compute complex calculations and give accurate. Cost estimation.
ProEst helps commercial construction companies maximize profits by helping them streamline cost estimation, takeoffs, and more. We believe commercial construction companies grow at scale through visibility of data, cohesion among teams, and accurate estimating.
To see how ProEst can streamline your commercial construction processes, contact one of our experts today!