Budgeting and Estimating
Updated: Jun 23, 2020
Proper budgets and estimates
If your commercial construction contracting business is to survive, then you must be equipped to provide proper budgets and estimates. More importantly, if your construction business is to be profitable, then having budgeting and estimating skills in place is essential.
Develop a total project budget
Developing a project budget includes:
Analyzing requirements and drawings to verify the scope
Determining cost and time parameters
Allocating enough for contingencies and cost escalation
Moreover, once the project is underway, the budget allows you to:
Remain vigilant concerning variances
Make decisions based on actual costs
Therefore, using a project budget establishes useful guidelines for completing profitable jobs.
Benefits of proper budgets and estimates
While there are some easily spotted benefits to using proper budgets and estimates such as:
Avoiding inaccurate bids
Curtailing the constant use of change orders
Collecting sound financial information on which to base decisions
There are other benefits which are less easy to measure, for example:
Realizing a greater ability to make continuous improvements and anticipate problems
Growing an improved sense of clarity and focus
Achieving more confidence in your decision-making
Estimating – the cornerstone of construction projects
Accurate cost estimation is critical for creating and maintaining a feasible budget for construction project costs.
Estimating is the process of evaluating or calculating the amounts of material, labor, and equipment necessary to complete a project. Therefore, it becomes the cornerstone upon which all else rests. Above all, getting project budgets right and controlling costs is essential to project success.
And, like any other phase of construction contracting, having the right tool for the job makes the difference. Thanks to technology, estimating has been dramatically simplified and streamlined.
Knowify makes it easy
The team here at Schulte and Schulte knows, uses, and recommends the use of the software developed by Knowify. They provide a step-by-step process which moves from bidding, to the proposal, to billing.
In no order, I’ve listed a few of the features or functions construction contractors note they can apply when using the system developed by Knowify.
Labor costs tracked precisely
Avoid missing items when invoicing
Change orders sent and approved quickly
Monitor the profitability of each current job
Better track materials
Better organization of invoice tracking and employee productivity
2-way sync with QuickBooks
Ability to create AIA style billings
Moreover, one contractor said Knowify is a “one-stop-shop for estimating, time-tracking, invoicing, and scheduling.”
To sum it up, Knowify helps build a budgeting plan, measures results, and improves overall operations.
We desire to familiarize you with business concepts, which will make it easier for you to be a better commercial construction subcontractor through our blog posts. Some are new ways of looking at things, and others are refreshers.
Schulte and Schulte Provides Accounting, Contract Document Management, and Advisory Board Level counsel for small to medium commercial construction subcontractors.
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