How to Use the Estimate Feature in QuickBooks

If you do job or project costing, then it’s important to use the Estimate feature in QuickBooks®, but that feature is often underutilized for a few reasons. Could be a lack of understanding on how to work with the estimate template in QuickBooks. Could be that a spreadsheet or other software is used to actually determine the estimate, so why bother entering it in QuickBooks? Isn’t that an unnecessary step? No!!

If your estimating is fairly simple, then usually the regular estimate form in QuickBooks works. You can enter your anticipated costs for the various items, mark it up and arrive at a number you want to charge your customer.

I will admit that there are many times when the estimate form in QuickBooks can be inadequate so a spreadsheet or other estimating software often works much better. But that estimate does belong in QuickBooks.  Even if you just give your customer a fixed price, your estimate still belongs in QuickBooks.

The estimate is the budget for the job and if entered in QuickBooks, it’s easy to review. The costs are already being entered into QuickBooks, so with an estimate in there, too, you can run Estimated Versus Actual  and Cost to Complete reports. Doing that elsewhere can be very time consuming and double work. You can also drill down for more detail if you want. If all your costs show as “No Item” instead of different services and materials, then your costs are being entered incorrectly; check out this blog.

If your customer wants to make changes along the way, as so frequently happens, QuickBooks will let you do a change order and can keep track of the changes for you. And, you can easily invoice off the estimate, order materials or even enter orders for work you will sub out. So once the estimate is in, the other pieces can be simple clicks.

There are several ways to enter an estimate and some can be fairly quick.

  • Enter as you would an invoice
  • Use Item Groups for faster entry (see my blog on Item Groups)
  • If you frequently use the same format and Items, consider memorizing an estimate so next time you just pop in the numbers and change the Customer:Job (see my blog on Memorizing in QuickBooks)
  • If this job is similar to another you’ve done, you can duplicate the estimate from that other job, change the Customer:Job, and edit the numbers and Items accordingly.
  • Depending on how the spreadsheet is setup, sometimes you can use an import utility to move the estimate into QuickBooks.
  • And, if this is a 3rd party estimating software, frequently there is a way to export that estimate and then import it into QuickBooks.