Cost estimators help calculate the price of materials, equipment, and labor needed to complete construction work. The price predictions provide the basis for project budgets and bids, and they can impact overall performance and profitability.
Though many factors outside of your control can result in increased project costs, poor estimates, and inept planning may be to blame for delays and cost overruns. For example, work could stop due to a lack of materials or the absence of cash to meet payroll obligations. These issues often trace back to inaccurate cost estimates.
Cost estimation is an essential part of pre-construction planning. Although all projects have some similarities, the details of estimates vary by project type. Estimators and project managers need cost estimating software that accounts for these nuances and provides the tools necessary to get the most accurate picture of materials needs.
Effective construction estimating software needs particular features and attributes. Accuracy in measurement and unit cost is vital, but so is the capability of everyone involved in the planning to access estimates. Systems integrated into project planning, accounting, and communication platforms can improve accessibility, collaboration, and access to data from similar projects.
Here’s a look at three of the most significant key features of cost-estimating software.
Accuracy is essential for planning a project budget. Profit margins depend on project costs. Surplus materials can add to the price tag without adding value to the construction, and shortages can cause delays and increase labor costs as workers earn hourly wages while waiting for additional materials to arrive.
Overestimating can also cause contractors to lose bids unnecessarily. Companies with accurate estimates will likely have lower proposals. Also, depending on the contract type, contractors may be liable for cost overruns. In other words, underestimating could limit or eliminate profits.
Software can ensure accuracy by accounting for specific qualities and nuances of different materials. Features like digital measurements, access to blueprints and other planning documents, and AI-powered calculations can ensure the most accurate estimates possible.
User-friendly interfaces make estimating easier by allowing users access to advanced features without requiring expert technical skills. Estimating is often a collaborative process, so users in different locations and with different experience levels will need to use the software. Intuitive navigation and controls can give everyone the ability to participate in the process.
Takeoff software for cost estimators facilitates ease of use by bringing all the data and tools necessary for accurate estimates onto one platform. Specialized takeoff software is also available for contractors and quantity surveyors. These platforms have specialized features that facilitate accurate estimates depending on the project role.
Integration of other construction software tools with cost-estimating platforms provides two advantages. First, it puts information for accurate estimates at contractors’ fingertips. Access to design and planning platforms, real-time materials pricing, and supply chain data can enhance calculations for a bid. Also, information from past projects and estimates can provide precedent for pricing decisions on the current project.
Second, integrations can streamline project management. For instance, the project manager can use integrated scheduling tools to automatically provide a timeline to subcontractors. The budget can also be used to autofill information on accounting and invoicing software. These connections and automation enhance precision, cut down on manual data entry, and reduce the chances of human error.
Cost estimators are integral for winning bids on construction projects and creating profitable plans for carrying out jobs.
A cost plan is essential for creating a budget, and it provides the base on which project managers and accountants build the entire budget for the project. Data from initial estimates inform important project decisions, and it offers information and plans that are useful to every contractor and subcontractor working on the project.
Here is a closer look at these benefits.
Cost estimator software facilitates accurate cost plans covering all different aspects of the project, including labor, materials, and specialized services. Cloud-based platforms provide access to contractors and tradespeople who can offer insights to improve accuracy.
Project managers and other decision-makers can then build budgets for the entire project, accounting for materials, labor, equipment, and all the other factors necessary for project completion. They can also use the information to make a financial plan, calculate revenue, and obtain financing or lines of credit to fund operations.
Cloud-based cost estimation software can also enhance decision-making in three ways. First, it puts cost data in one place, providing project managers, stakeholders, and other decision-makers with opportunities to make informed determinations.
Secondly, detailed cost breakdowns allow managers to fine-tune specific areas of the budget. Finally, cost-related insights from specialists can provide information decision-makers would not otherwise have. The collaborative nature of cloud-based cost estimation tools makes it possible to share these nuances and include them in decisions.
Cost estimation software can automate tasks that would otherwise take additional time and employee hours. With automated data entry and automatically filled forms, employees are free to work on higher-level tasks, such as organizing labor, ordering materials, and communicating with stakeholders. These productive tasks have more impact on the success of the project than necessary but mundane and time-consuming calculations and data entry tasks.
Finally, quality cost estimator software can reduce human error. Some programs even rely on AI to detect mistakes so that they do not impact the overall budget.
Advances in cost estimation involve the use of artificial intelligence, machine learning, and data analytics. AI and machine learning can use cost data and measurements to automatically suggest pricing. These systems can also detect errors made by estimators.
Because they can crunch vast amounts of data, these systems are accurate at estimation. They can also recognize patterns and trends and project them into the future, creating forecasts useful for decision-making and planning.
Leading cost estimator software producers already include AI and machine learning features in their software. These features may bring benefits that can impact revenue, increase the odds of bid acceptance, and free employees to perform higher-level tasks instead of basic manual jobs.