Estimating strategies

The estimate in QuickBooks is critical because it is the place that holds the original estimate and any changes to the estimate.

QuickBooks estimates are required for progress invoicing and for creating the Job Estimates vs. Actuals Summary and Detail reports. The Job Estimates vs. Actuals Detail report for a project is critical to the person who manages the project and to the estimator. The project manager will want to see this report after payroll is processed each pay period and all project bills have been entered; this will help keep the project on budget.

There are two basic strategies for handling your estimates:

• Create all your estimates using QuickBooks.

• Create detail estimates using a spreadsheet or another estimating program, and then bring a summary estimate into QuickBooks.

Creating estimates using QuickBooks

If you do not need a very large and complicated detail estimate, you'll probably want to create your estimates using QuickBooks. This has the advantages of using one accounting program, not having to do duplicate data entry for estimates, and having your full estimate details in progress invoices and job cost reports.

Once your estimates are in QuickBooks, the estimates flow automatically to invoices and job cost reports. See Estimating and invoicing overview to get an idea of the QuickBooks process flow from creating estimates, through invoicing, to receiving and recording payments.

See Creating estimates for information on how to create estimates in QuickBooks.

Creating detailed estimates outside of QuickBooks

Sometimes a general contractor or home builder may want to use a spreadsheet or estimating program for detail estimating. For example, if you are creating an estimate to build a new home you might have a list of 10 to 20 different building permits, licenses, and fees that need to be listed on a spreadsheet template under the phase Permits. A company that builds new homes might have a spreadsheet template designed for their business that has several hundred or a thousand different items on it. That spreadsheet is designed as a "tickler" to remind the estimator of costs that might get forgotten if they weren't listed.

If this describes your situation, you might want to use a spreadsheet or estimating program to create the details. Then use your estimating program to generate a summary by phase report, and follow the instructions in Creating estimates to enter the summary estimate into QuickBooks.