{"id":16432,"date":"2020-06-10T12:01:43","date_gmt":"2020-06-10T16:01:43","guid":{"rendered":"https:\/\/www.foundationsoft.com\/?p=16432"},"modified":"2025-05-06T08:50:07","modified_gmt":"2025-05-06T12:50:07","slug":"3-ways-to-improve-bottomline-with-estimating-job-costing","status":"publish","type":"post","link":"https:\/\/www.foundationsoft.com\/learn\/3-ways-to-improve-bottomline-with-estimating-job-costing\/","title":{"rendered":"3 Ways to Improve your Bottomline with Estimating and Job Costing"},"content":{"rendered":"

Guest Contributor: Chris Lee, Esticom<\/a><\/h4>\n

As a contractor, you must bid and win projects to stay in business. You have to estimate low enough to win against many competing subcontractors, but high enough to make a profit that is worth the risk you are taking.<\/p>\n

How many bids you need to make in a year can vary widely. When bidding on public works, the bid-hit ratio<\/a> for a contractor is between 6:1 and 10:1. This means that to win a single bid, you need to apply to 10 different jobs.<\/p>\n

But it doesn\u2019t stop there. Once you\u2019re awarded the project, you must use the estimated costs<\/a> as your budget baseline to control costs and keep the project profitable. Then, after the project is complete, you can compare your actual and estimated costs to see how your actual productivity compares to your estimated productivity.<\/p>\n

Taking these steps will give you a starting point to improve on future projects.<\/p>\n\"UG<\/a>\n

<\/span>Step 1: Detailed Estimate with Construction Cost Codes<\/span><\/h2>\n

A detailed and accurate estimate is the first step in the process. No amount of project management or micromanaging your team can turn around a poorly estimated project. The right takeoff and estimating application will allow you to estimate the project, then build out a proper budget using standard cost codes.<\/p>\n

As you perform this digital takeoff, the labor, material and other cost types will be automatically calculated and rolled up by cost code. This results in a manageable budget that can be pushed directly to your construction accounting software once the project is awarded.<\/p>\n

Below is an example of a job that requires interior lighting and power work. With these tasks in mind, costs are budgeted for materials, labor and equipment so the actual costs can be compared throughout the job.<\/p>\n