What is a Cost Estimate?
A Cost Estimate is a document comprising a breakdown of the possible expenses on a particular project. This functions by determining both the quantity and expected value of the resources needed to meet the project's budget. Moreover, this document guides the management in making decisions and seeking alternatives concerning the demands of the project. The accuracy of the data in the document closely depends on the defined costs of the resources, which also includes labor and the required materials. Having a cost estimate can significantly help you avoid overspending or going over the intended project budget.
How to Create a Cost Estimate
While it relies on accurate or realistic data to be considered reliable, a cost budget estimate needs to be presented formally and professionally. In terms of appearance, a cost estimate consists of tables, which has to have enough rows and columns to accommodate all of your data. If these reminders seem overwhelming, then simply refer to our list of guidelines and tips below.
1. Check Capacity of Project Scope
A cost estimate will help you to determine the budget you need to finish a particular project. Whether you are a building, electrical estimator, or chief estimator, it's always important to consider the finances of the company. This way, you'll find out if the budget is enough to suffice the project scope and its expenses.
2. Gather the Necessary Details
When managing a construction project and determining its financial capacity, you need to gather all the necessary resources based on the extent of your project. To make it easier to input and extract the information, you should categorize them and create a focus on each area. After finalizing your list of project necessities, you can begin requesting information about the prices and then look for cost-efficient alternatives.
3. Classify through Tables
Considering you've finished finalizing your data, you can start creating the tables needed for it. Add rows and columns and fill each one with the required information. Typically, the document's format would have the leftmost columns consist of the names of the accounts, equipment, or materials. For the topmost columns, it usually indicates the headers for the quantity, unit costs, total prices, and the overall estimated costs for the project.
4. Incorporate a Formula
The great thing about using tables to input data is that you can incorporate a formula to perform both simple and complex computations for you. There is a vast range of formulas that you can put into a table, and it includes more than just sums. Formulas will help you save a lot of time since you no longer have to do the math to come up with the totals and percentages. Other than saving you time, you're sure to produce accurate project estimates for as long as the formula is correct.
5. Recheck for Errors
Before you proceed to print and use your cost estimate, review the data and formula. This is to ensure that no errors find their way through the finished product. Additionally, check the overall appearance of the document to see if it looks presentable and professional. It's better to keep things simple to force readers to focus on the document's relevant content.