Still Using Excel for estimating?
Discover the Top 4 Reasons to Show Excel the Door
To Excel, or not to Excel; for many construction estimating professionals, that is the question. In this article, we’ll uncover four of the most compelling reasons to replace old-school Excel spreadsheets with a more powerful software solution designed specifically for construction estimating.
Reason #1: Integration
“One Team.” You’ve heard it before, and it certainly applies to effective estimating. To some contractors, there are no obvious drawbacks to using Excel spreadsheets for construction estimating. After all, they’re easy to use and readily available. Others, however, experience Excel limitations as their company expands and grows, including:
- Excel may not feed other computerized systems that you use, such as accounting or scheduling
- Your projects may involve very complex calculations
- You’re going to estimate as a team that has to work together, and Excel has limited multi-user features
Custom programming can fix some of the issues, but it can be expensive, and customizing Excel at the user level makes it difficult, if not impossible, to maintain a standardized approach for multiple estimators. Even more problematical is getting the right data to transfer correctly into your other back office system. In many cases, estimate data may have more detail than a user may want to incorporate into scheduling, job costing or project management, leading to inaccurate calculations and unwanted complexity.
Software created specifically for construction estimating, on the other hand, offers direct integration with many popular construction accounting software solutions, eliminating the need to manually enter estimate data into accounting software on the back end – a common source of unintended errors. Given that estimate data automatically transfers, job costing becomes a true extension of the values used to create each estimate.
Reason #2: Scalability
For many firms, there comes a time when Excel simply isn’t big, or powerful, enough to tackle the job at hand. And if growth is a business priority—and it should be– that can spell trouble for contractors who cling to the familiarity of Excel.
For large companies with multiple estimators, Excel offers each of them greater individual flexibility. However, that will come at the price of a lack of company-wide standardization within the estimating function. Moreover, if those same companies are working on complex projects, Excel may not perform as efficiently as specialty construction estimating software that comes with the processing power necessary for complicated calculations. And, as noted above, Excel presents challenges when it comes to integration with other office functions.
Outgrowing Excel as an estimating tool is largely dependent upon the specific building sector and the size of the builder’s business. While the business potential for small residential and remodel contractors may be unlimited, keeping up a database and debugging for multiple users can be a challenge many are unable or unwilling to meet.
There is the initial set up time for the Excel estimate template, and then you have to verify and test all of your formulas to make sure you have done it correctly, whereas with a commercially available product, you pay for that and they assume the liability in exchange for your money. If you get to the point that you don’t have the time or manpower to maintain and verify the integrity of your data, then a different solution is the answer.”
Reason # 3: Accuracy
Getting the numbers right can make all the difference between a winning bid and a losing one—and just as important, making a profit once your bid is accepted. With software created specifically for the needs of estimators, calculations for materials, labor, equipment, taxes, mark ups, bonds, insurance and other costs are automatically calculated, leaving no room for human error. Conversely, Excel requires each user to build formulas into the spreadsheet, where they can be altered—either deliberately or by mistake—with negative and far-reaching results. Estimating software also offers a level of insight that Excel simply can’t. Once an estimate is complete, it can be summarized by cost type—material, labor, sub—or any level of grouping, including user-defined groups by phase, area or location, offering greater control and more informed decision-making.
Moreover, construction-specific estimating software offers continuous upgrades and enhancements that reflect current construction industry conditions. As new computing and operating systems are introduced—or industry changes occur—enhancements are readily available to ensure the most relevant, accurate construction estimates.
Reason #4: Support
Without the right team in place, no construction project can get off the ground, and the same is true of the construction estimating process. Unlike Excel, estimating software developed specifically for the construction trade typically offers a dedicated team of qualified construction professionals who stand behind the product—ready and willing to answer questions, troubleshoot potential issues and help optimize the value of the investment. Their collective understanding of the construction industry and estimating process is invaluable in helping estimators build and maintain a database that reflects special requirements as well as changes in the industry itself.
To streamline the transition from Excel, onboarding teams are uniquely equipped to help import historical data from the Excel environment, and make the move to standardized estimating system fast, seamless and trouble-free.
The Bottom Line
Most contractors will outgrow Excel spreadsheets as the scale and complexity of estimating projects increase-running the risk of reduced profitability and competitive disadvantage. Contractors who envision future growth are encouraged to consider the short and long-term benefits of data-based estimating software, including improved accuracy, scalability and a dedicated support team.
To learn more, fill out the contact form, or call 800-255-7407 to schedule a personal demonstration.