Common Estimating Mistakes When Using Excel

Microsoft_Excel_2013_logo.svgAre you still using Microsoft Excel to prepare your estimates? Excel is a great tool. It's easy to use, great at crunching numbers and most of us have it. It's now wonder that most contractors use Excel for creating estimates when they start out.

But Excel (or other generic spreadsheet software) may not be the best tool for creating and managing your estimates. While Excel is easy to use, it's also easy to make mistakes or waste time using it to manage your estimates. In the rest of this post, we'll share some of the more common mistakes and time wasters we've noticed in the field. Be on the lookout for them when using Excel to prepare your next estimate.

 

Common Estimating Mistakes When Using Excel

Creating an estimate in spreadsheet software means you either a) start building your estimate from scratch or b) maintain a number of templates that you use as your starting point.

When you start from scratch every time, estimates not only take longer to complete, but you also run the risk of underestimating your project due to a forgotten or improperly quantified item.

To protect against the risk of forgetting items, many contractors will start with a template and modify it for the estimate they are working on. The risk with this approach is making sure that you are starting with a template that has up-to-date pricing. If you have several types of projects that you are maintaining templates for, managing these templates can become very time consuming.

Creating an estimate from a template often begins with deleting the items on the template that are not needed for the project. Depending on how your spreadsheet is set up, deleting items may lead to also deleting formulas. If changed formulas go undetected, you could lose a bid you would have one. Worse yet, you may end up winning a project that you mistakenly under estimated.

There is one other area related to estimates where we often see time being wasted and mistakes being made. It happens when a project is won and the estimates must be copied from your spreadsheet software into your accounting and/or construction management software. Not only does this process create duplicate work, it also increases the chances of data entry errors.

Is There a Better Way?

We've only covered some of the major drawbacks of using spreadsheet software to prepare and manage your estimates. We hope by raising your awareness of these common issues, you'll be better prepared to protect against them when preparing your own estimates.

Many construction companies opt to protect against these risks and increase the efficiency of their estimating process by moving from spreadsheets to specialized construction estimating software. We'll share more information about estimating software on this blog. In the meantime, if you would like to see a demonstration or discuss how estimating software might fit into your business, feel free to contact us.

 

 

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