Emily Clarke

How Accurate are Construction Quotes?

Construction projects, big and small, often start with a quote. Whether it's a light renovation or a large-scale construction job doesn't matter. These projects are complex, involving multiple suppliers, subcontractors and more. With those factors and the possibility of unknown contingencies, developing an exact cost breakdown isn't easy. Many companies utilize a payment processor for contractors, giving customers more options on how they want to pay for these projects. If you are looking for a payment processor for contractors, visit this website.

But quotes are still necessary to give clients a better understanding of what a contractor can do and roughly how much a project will cost. That begs the question: How accurate are quotes?

Understanding the Difference Between a Quote and an Estimate

In the construction world, you'll hear the terms "quote" and "estimate" used interchangeably. However, these two terms reflect potential pricing differently.

Estimates reflect what a project is estimated to cost. They're highly accurate figures that include everything from the cost of raw materials, labor, the cost of using necessary equipment, taxes and more. Contractors supply estimates as a single figure or cost range. But, they take more work to prepare than most realize.

Most contractors charge a fee to create an estimate because it includes much research and preparation. The cost is usually modest and is easily covered through a payment processor for contractors. With an estimate, contractors provide detailed documentation covering every aspect of the project. Generally, a more comprehensive estimate will include more insights and better accuracy.

A quote is different and comes with the added complexity of time restrictions. A quotation includes figures from material suppliers. Contractors work with suppliers to determine how much it would cost to purchase materials within a specific timeframe. As a result, quotes are only good for a certain period. Usually, it's 30 days.

Outside that 30 days, the costs of materials are subject to change. Think of a quote as a more accurate but time-sensitive fixed rate for the project. Clients only have that 30-day window to accept the quote and begin the project. Otherwise, it could change as supply and demand affect pricing with the materials supplier.

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Emily Clarke writes about sales and business automation tools for construction companies and contractors. You can find her thoughts at software for contractors blog.