10 Tips to Create Cost Effective Estimates

Do you know that? An accurate project assessment is more important than the billing itself. It's your ticket to capturing the project you want.

The estimate is your first formal interaction with the client. It has to be perfect. It's the first impression you leave with your clients, so be sure to avoid any mistakes.

Estimating a project is influenced not only by known factors such as budget, resources, type and scope of project, but also by unknown variables and risks. The project manager faces a number of challenges when preparing an estimate.

However, an accurate project assessment is critical to the success of the project and the organization. By using the right project assessment methods, the project manager can make accurate estimates.

Also read: How to Create An Estimate?

Here are some tips for accurate project estimating

1. Discuss project priorities

In order to prepare an accurate project estimate, you need to clarify the project priorities. For example, you can afford to spend more on a project, but you can't extend the deadline. You need to inform your team of the priorities so that they can create an effective project estimate using the estimating and Invoicing software to complete the project.

2. Negotiate again and again!
Sometimes it's not possible to meet the client's budgeted numbers. The tendency of project managers to keep the numbers within budget may be appealing on paper, but the practical world can change the whole picture. Always keep your risk factors in mind and prepare your estimates accordingly. This will save you a lot of trouble later on.

Try to stretch your budget. And if the budget can't be changed, try to find out what can be done with a limited budget. Generate appropriate cost estimates using cost estimating software and share them with your clients to get real numbers.

3. Consider the risk factor
Projects are inherently risky. Some risks are known to your team, others are hidden. A quick risk assessment is not fruitful in such cases. Your team needs to be educated about risk management in order to make an accurate assessment of the project. You must implement an appropriate risk mitigation plan in your project assessment.

Your invoice and estimate software will have a special column to indicate risks. Don't ignore them!
Be sure to perform a detailed analysis of the project. A more detailed breakdown will result in a more accurate estimate.

4. Follow a proper planning process
After breaking down the project into smaller components, three scenarios - worst case, best case, and most likely - should be analyzed for each component. This analysis should be done especially for components that are relatively risky or new to the team.

Make sure you and your team are on the same page when it comes to project evaluation.

For example, if your team gives you an estimate of whether a task will be successful within a certain time frame, make sure their assumptions about the task match yours. Generate your estimates in an invoice estimator software, such as Invoicera, and share them with your employees on a dashboard. This will keep you on the same dashboard.

Always include contingencies in your project estimates. Contingencies can be in terms of costs, labor hours, and resources.

5. include common activities
When preparing project estimates, the project manager usually overlooks common activities such as meetings, reviews, etc. However, these activities are fairly common in any project and should be considered in the project estimate.

6. Use lessons learned and data from previous projects.
Reviewing data from similar projects in the past will produce better project evaluations. If it's a task you've done before, you'll have a clear idea of the costs, resources, and hours needed to complete it. This is where estimate management software can help you store all your projects on the same dashboard and make them available.

7. More than one project estimation technique
Always use more than one project estimation technique to produce project estimates. This will help you make your project evaluation more accurate. Learn from your past experiences and analyze the projects you have recorded in your assessment tool.

SUMMARY
In addition to producing accurate project assessments, it is important to send and manage assessments in a timely manner. This would ensure timely approval and start of the project. Good estimate management is essential for any business to ensure smooth operations and payment cycles.
Using an estimate and invoice software like Invoicera allows you to manage estimates efficiently and get paid on time.

Originally published at https://www.invoicera.com on October 25, 2019.