IntroductionThe 360Difference Cost & Price Book is a custom library of Unit Costs you have either created yourself or modified from a 14,000 items plus starter data set we provide to get you started. Out of the box 360Difference contain many Unit Cost items for Tasks Parts and Assemblies for you to modify and make your own. Jim Erwin the developer of the now defunct Synapse Software Buildworks once wrote regarding the use of “canned estimating data”:
…IMHO, doing detailed item estimating for residential using national costbook prices is like using a community toothbrush. If someone is going to the time and effort of detailed item based estimating, they should only be doing it with their own regular items and the current prices that they pay. If they don’t want to make that effort, then they should be doing unit cost estimating with composite line items and historical data. Considering the narrow margins, high cost of delivering a finished product, and the risks of running a business, just “winging it” is a formula for disaster. Estimating is not a total solution. Defined work processes, effective controls, professional customer relations, and a method of measuring and comparing performance all have to be a part of a successful plan for profit.
360Difference is designed with tools to help you take “canned estimating data” and make it your own.
A contractor estimator needs to look at the “canned” book figures for labor hours as starting benchmarks, they are not absolutes. The labor hour units are standard as to “generally speaking” but individual as to interpretation. They are based on valid statistical samples that those publishers have researched but we don’t know the exact criteria they had in mind so they are subject to interpretation, in fact your interpretation. Use those data book labor figures with your own interpretation of their meaning. If it “sounds right” then go ahead and use it an monitor the results to see how accurate your judgment and interpretation actually turned out to be.
- The Approval Process That Makes The 350Difference Cost/Price Book Data “Your Own”
- What Goes Into Making Up a Good Accurate Robust Item In Your Company’s Cost/Price Book?
- The Numbers That Make Up Your Unit Cost Items in The Cost/Price Book Are Relational
- What Other Data Can Be Used To Make Up A Robust Unit Cost Item
- Can The Cost/Price Book Displayed Marked Up Prices?
- The Production Cost & Price Book Divisions View
The Approval Process That Makes The 350Difference Cost/Price Book Data “Your Own”
One of the neat features I have programmed into the estimating module of our 360 Difference system is as you review and approve the starter database items or any “canned” database items in your unitcost costbook in the detail view for an individual line item you have a checkbox you can check off to indicate that the data components in that line item that you have “approved” and the software also gives you a visual cue or warning to let you know what data hasn’t yet been accepted and “approved” as your own company’s data.
Once you check off the Labor Materials External Sub Contractor or Equipment components as approved (You can lick on the thumbnail image on the left to see a screenshot of a line item detail and the thumbnail below to see a screenshot of the list of costbook items in that sub-category) the field containing the total for that particular component changes from pale orange to white and that pale orange flagging color is user modifiable too if you want to lets say change it to pale yellow or red.
The estimator can then quickly see if the data they are using in an estimate have been used before and has been modified or approved for their own company’s use and they can even review the date it was reviewed and approved too to make sure it is up to date and current.
I always cringe a little when we get a new user who has just bought my program that tells me they want to use it to produce and estimate they want to get out to a client next week! Geesh! That’s really not the right way to work with any new estimating program.
To really use any estimating program correctly and accurately you need to do your homework and spend some time setting it up correctly (and we’re very happy to work with and help our clients do just that from training then on how to do it themselves to working as their virtual assistants, like someone in their office, performing the set up process for them).
Our goal with 360 Difference Estimating is to give our users the tools , training and help our users need build a library of estimating data that is truly theirs.
While this may take some time and effort in the beginning it pays off in the long run due to both the accuracy of the costbook line items they’ve built and they no longer have to put their faith in money into purchasing cost books year to year with quarterly updates.
What Goes Into Making Up a Good Accurate Robust Item In Your Company’s Cost/Price Book?
A good accurate robust Cost/Price Book item should include:
- A Description
- The Unit
- The LaborHrs for the Item (Productivity Benchmarks)
- The LaborCost for the Item (Internal Trade Rates )
- The Materials Cost for the Item
- The External Subcontractor Cost for the Item
- The Equipment Cost for the Item
Those things all go to make up the “Standard Cost” for that Unit Cost Item.
“Consider not only the cubic foot, cubic yard, lineal foot, square foot, pound or ton but all of the complicating conditions encountered in putting the materials in place.” — That’s The Golden Rule of Construction Cost Estimating, as quoted from Richardson Engineering Services General Construction Estimating Standards. If the “complicating conditions” are typically common you need to account for them in your Unit Cost Item but if they aren’t commom you estimate them as a seperate line item in the estimate modifying your Standard Cost.
The Numbers That Make Up Your Unit Cost Items in The Cost/Price Book Are Relational
Most estimating programs allow you to build your own database of Direct Job Cost items but the data is more often than not flat. With 360Difference you can produce estimate items with relational depth so that your data can be updated automatically as the component cost changes.
In other word if you have a Unit Cost Item in your cost book for installing a particular profile of Crown Molding:
— Install pine crown moulding, 5-1/4″ | LF | $2.93 labor | $5.07 Materials ($4.44 for Pine Primed Crown Moulding & $.63 for Glue & Fasteners) | LHrs 0.058 (3 min 29 secs per LF)—
- …and the price you pay for 5-1/4″ Pine Primed Crown Moulding goes up ¢10 per foot then 360Difference will warn you that one of the component costs for that Unit Cost has gone up in Price and the program will ask you if you want to update the Unit Cost for that Item or all the Items in the Cost/Price book that use that Material Cost as a component.
- …or if you decide the Productivity Rate for Installing Crown Molding needs to go up to from 0.058 (3 min 29 secs) per LF to .075 (4 minutes 30 seconds) per LF 360Difference will ask you if you want to change all the Unit Costs based on that Productivity Rate.
- …or if your Installing Labor Rate goes up or even the Workers Comp Rate that Installing Labor Rate was based on goes up.
That is how relational data works.
What Other Data Can Be Used To Make Up A Robust Unit Cost Item
Well the obvious answer is it can contain the written Specification for the Task Part or Assembly described. But the record can all contain Photos of Item. Installation PDFs or Training Videos too and you can also inclued web links too.
Can The Cost/Price Book Display Marked Up Prices?
Yes with the click of a button you can switch over to Price View and view as William Asdal says in his book Defensive Estimating: Protecting Your Profits the retail street prices on every line.
The Production Cost & Price Book Divisions View
While it comes setup with 38 Cost Categories the Task Categories and Sub-Categories are completley customizable to suit your company’s operations in the Task Categories file.