How do you prepare your internal and external pricing documentation? No matter how you capture the process, Archdesk has digital solutions that can support your construction company and streamline the process of creating estimations and proposals for projects. Check out how it works in practice!
Which part of the construction processes do you dedicate the most time to? Planning or execution? Did you know that even 39% of projects fail due to the lack of proper planning? It’s because finishing a project on time and within the budget depends heavily on the early stages, during which the level of costs, the scope of work and the project's timeline are established. That is why today, we concentrate on the project phase called estimation and proposal to show you how you can use Archdesk in different ways to improve this process!
Creating pricing documents usually starts when a specialist contractor decides to take part in tendering and submits a tender to offer the execution of a part of their projects. Recently, we have published an article about The Tendering Process in Construction but today, we will look at it from the specialist contractor's perspective.
A specialist contractor who wants to submit a proposal for the tender needs to prepare the following financial documents:
Proposal: external document with prices for a defined scope of work which is sent to the general contractor or real estate developer (the company that sent the request for proposal/quotation)
Estimation: internal calculation of the cost of the scope of work defined in the Invitation. In this document, the specialist contractor specifies how many hours, employees, materials, how much waste and logistics will be needed and their costs
Everything looks nice and easy on paper, however we understand that preparing these documents might be a challenging and lengthy process in real life. After all, an employee responsible for preparing documentation has to calculate all the costs, include changes of time, calculate the competitive margin and fulfil all needed requirements. How to manage it then?
Even though every specialist contractor needs two types of financial documents: internal and external, the whole process can vary significantly depending on the company. Moreover, the names for the documents can be different as well! A proposal can often be called a quote, bid, or proposal of quotation, while estimation can be referred to as BOQ (Bill of Quantities) or BOM (Bill of Materials).
When it comes to the process itself:
Estimation and Proposal can be issued in one document, but with different visibility for the client and the internal use
Estimation and Proposal can be two different pricing documents created separately
Estimation is created first and then a proposal is issued based on the data in the estimation
Proposal is prepared from precalculations based on similar projects completed in the past. Then once the general contractor accepts the proposal, a detailed estimation is issued.
Just as the same process's names may differ significantly, the process itself in various companies might differ as well. However, no matter how you capture the estimation and proposal process, Archdesk is one tool that can support each path, with tailored solutions to your needs. Not convinced yet? Let's see how it works in practice.
Remember: Here, we present the main paths of managing your Estimations and Proposals. However, there are many possibilities inside each of them to customise the process according to your company’s needs. To discover all the Archdesk’s functionalities, schedule a call with our specialists.
Imagine that you are requested to deliver ten office chairs in your scope of work as a fit-out company. While estimating, you want to have a clear comparison of predicted costs, planned margins, and the final price for the client. Still, at the same time, you want to avoid creating tons of files and unnecessary documentation.
In Archdesk, you can create a quote with all the needed information that will serve internal and external purposes. Thanks to variable visibility, you can send a proposal directly from the software without giving away internal details. In the end, you can benefit from both pricing documents in one file, clearing out the whole process and avoiding additional documentation.
If your scope of work is the whole conference room fit-out, you can conduct the process with Archdesk as well. In the proposal for the client, you can specify only the final cost of the project (or define it more, align with the client’s needs). Then thanks to the advanced item feature, you can determine internally what exactly will be needed with aligned costs. The flexibility of Archdesk gives you the possibility to manage it all in one without giving up data details required for internal purposes.
Before sending their proposal to the potential client, some companies prefer to calculate project costs precisely. Such a pattern is very beneficial for general contractors as it eliminates the risk of underestimating the costs. However, such a detailed analysis is without doubt both time and energy-consuming.
If a company has described types of projects (house, installations) with predefined costs, it is possible to set a quote template in Archdesk. Thanks to that, once you click on the specific type of project, you have all sections and items of a particular type already added. Every time there is a possibility to change this structure and customise it to the specific project’s needs, but such automation gives you a benchmark to start from.
Creating internal estimation once the client accepts the proposal can also be done with the support of Archdesk! If you want to find out how it works in detail, request a demo of our software!
After reading the headline, you are probably wondering if I keep my calculations in Excel the same as now, why do I need this software at all? It turns out that even in this combination, Archdesk can support your processes! We understand that sometimes after many years of working in spreadsheets and setting up complex Excel calculations, you might not want to change it directly for a new digital solution.
To facilitate the whole process, Archdesk can be set up to read your excel spreadsheet and import the data. Later, you can add some crucial information in the system and issue a proposal for a general contractor or create a purchase order from that point. Also, you can pull in items from the catalogue of products, where you can define subitems needed for the specific product by using formula features. In the end, you can keep some parts of calculations in Excel, but thanks to Archdesk’s solutions, you can streamline the upcoming steps of project delivery.
What is your way of creating financial documentation? As you can see, no matter what method you choose, there are different solutions to support you in the process. We believe that a project’s success depends on the successful first stages of the delivery. Proper estimation and quotation are crucial. That is why Archdesk is a flexible tool that helps you improve this process according to your company’s needs.
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