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Estimate strategies

The estimate in QuickBooks is critical because it is the place that holds the original estimate and any changes to the estimate or proposal. In QuickBooks, a proposal is a type of estimate.

QuickBooks proposals or estimates are required for progress invoicing and for generating reports to compare estimates to actuals. For example, the Job Estimates vs. Actuals Summary report shows you if your proposals are high or low.

QuickBooks estimates are required for creating progress invoices.

There are different basic strategies for handling your proposals and estimates:

  • Create all your proposals and estimates using QuickBooks.

  • Create your proposals and estimates as standalone documents. You can use QuickBooks Customer Letters as a starting point.

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

Creating proposals and 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 Creating estimates for information on how to create estimates in QuickBooks.

Creating proposals and estimates as documents

If you want to create proposals in Microsoft Word documents, you can use QuickBooks Letters as a starting point.

If you create your proposals as documents, you might want to bring summary information from your proposals into QuickBooks proposals or estimates, especially if you want to create progress invoices or if you want to see reports on estimates versus actuals.

Creating detailed proposals and estimates outside of QuickBooks

Sometimes you may want to use a spreadsheet, word processing program, or estimating program for detail estimating.

For example:

  • A general contractor or home builder creating an estimate to build a new home 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.

  • Sometimes an architect, engineer, graphic designer, or ad agency—those that have large, detailed, line item proposals or estimates—may want to use a spreadsheet or word processing program for detail estimating. For example, a company that builds Web sites or manages large projects might have a spreadsheet template designed for their business.

That spreadsheet is designed 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, word processing, or estimating program to create the details and then bring summary information from your detailed proposals or estimates into QuickBooks proposals or estimates. This is important to do if you want to create progress invoices or if you want to see reports on estimates versus actuals.

To do this with an estimating program, generate a summary by phase report, and follow the instructions in Creating estimates to enter the summary estimate into QuickBooks.

If you create estimates outside of QuickBooks, but you create set or fixed price invoices in QuickBooks (as opposed to Time and Materials invoices), you are already entering the information into QuickBooks that you need for estimates. Consider entering your invoice information into the Create Estimates window instead of the Create Invoices window. Then you can automatically turn the estimate into an invoice by clicking Create Invoice at the top of the estimate form. This gives you both estimates and invoices in QuickBooks by entering the information only once.

See also

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