Lump-sum estimates are an ongoing challenge for the construction industry, but construction estimating software can help you to make the numbers add up.



When you’re handed a till receipt, the amount of information it contains can seem excessive. Dates, times, cashier names and product numbers are typically listed on the receipt above the only part anyone really notices – the price. However, that doesn’t mean this additional information is useless. If the cashier’s scanned something twice, the list of purchases will prove it. If there’s a “rate our service” option, you’ll often need the unique receipt number to complete any feedback forms.

The same principles apply when obtaining quotes for construction work, but on a far larger scale. There is very little useless information when it comes to projected costs. It’s essential to have an accurate breakdown of each separate expense, as well as detailed notes on subsequent negotiations or revisions. So why do construction companies still rely on scraps of paper and vague estimates when making purchasing decisions?

The price is right

Firstly, always ensure estimates are fully itemised. Going back to our hypothetical till receipt, the total price is only the aggregate of each individual purchase. It’s important to know how much these components cost, to determine whether the estimate represents good value overall. Subcontractors are notorious for submitting estimates as a lump-sum. Don’t be afraid to request clearer breakdowns of their figures.

Fluctuating fortunes

Estimates are prone to fluctuations and the sheets of paper they arrive on are useless for recording changes or amendments. By contrast, construction estimating software will enable staff to adjust costings in real time, as changes occur or contracts are negotiated. That ensures up-to-date reports are always at your fingertips, rather than requiring a lengthy trawl through silos of outdated or conflicting data. It also avoids nasty shocks at the end of a project.

One version of the truth

Irrespective of how the raw information comes to you, it should be immediately entered into a universally-accessible database or your construction estimating software. This will allow each employee to enter data from any location, on or off-site, providing real-time information to colleagues and enabling the commercial and finance people to keep a close eye on profit margins. It’s fine to receive data in a dozen different formats, as long as it’s logged and stored for easy interrogation afterwards. Miscalculations or missing data could have repercussions throughout the project lifecycle.

Check the small print

The cheapest estimate should only be chosen if it’s the best offer on the table. But this can be difficult to discern based on a headline price alone. It’s vital to know how the sums break down and whether each specific area is financially competitive or not. There can often be scope for negotiation in specific areas. For instance, if a subcontractor is trying to pocket an unreasonably high margin on raw materials. Returning to the till receipt analogy, scrutinise all the information provided (rather than just the headline figures) to identify savings and maximise efficiencies.

Lessons from the past

Finally, we can always learn from history. Detailed records on previous construction projects can be compared to current jobs, to see whether costs are increasing disproportionately in specific areas. This is difficult to accomplish when the information is stored in incompatible (and individual) data silos. But it’s easy when everything is recorded on a single centralised database within construction estimating software. This comprehensive information resource can also be used to achieve greater economies of scale and efficiencies – increasing profits without doing any more work.

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Don’t have a construction project communication breakdown