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Creating estimates

Construction estimating is one of the most difficult and important aspects of running a construction firm. Estimating is critical because bids that are too high may lose to lower bids from your competitors, while bids that are too low can reduce your profits or even make you lose money on a job.

Estimating data is an important part of job cost analysis. Comparing estimated costs to actual costs is a key aspect of job costing. By comparing estimated costs to actual costs you can see where you are estimating too high or too low, and improve the accuracy of future estimates.

Once the job is under way, you can create an invoice directly from your estimate. The invoice can be for the entire estimate amount, a percentage of the entire estimate amount, or a percentage of each line item on the estimate (called progress invoicing).

Follow these guidelines to plan and create estimates:

If you need to make changes to an estimate after it has been accepted by your customer, you can create a change order on the estimate form and resubmit the estimate to your customer for approval.

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