Purchase Orders from Estimates

[Dennis]

We've had a few requests to create Material Purchases or Purchase Orders directly from an Estimate. Similar to the Bill of Materials reports, only in an actual transaction.

Theoretically we can do this, and it probably wouldn't take long to program. However there are some issues with it:

1. Our current Bill of Materials report shows both gross and net quantities (with and without waste factor). Sometimes it makes sense to order the gross amount (e.g. for windows & fixtures), sometimes the net amount (e.g. for drywall or plywood). How should we handle that?

2. Many of our framing Assemblies just use lineal feet of lumber instead of precise lengths. That makes estimating simpler and faster, but it would make the Purchase Order less useful. How should we handle that?

Thanks,

Dennis Kolva
Programming Director
Turtle Creek Software

[rjaley]

Dennis-
I suggest that you add it as best you can in the next update of GS. It won't be perfect, but it will be a start. When GS user start to use it in the real world we will soon discover what is wrong with it and I'm sure you will hear about it, least from me :)-Jud

[MM]

Certainly a useful function. One of the reasons we are considering dumping QB Pro is it's lack of this ability. GS is on the top of our list and we are currently demoing it.

Regarding the assemblies being in Lin Ft and the PO's requirement for precise lengths I'm not sure anything needs to be done about it. Afterall one can already chose to enter the items in the estimate as either. The PO function would extract the data from the estimate as it was entered (like other GS functions already do.) I suppose that one would have to update the assemblies such that it referenced precise lengths.

Regarding gross and net quantities wouldn't it make sense to have a check box added to the cost item screen to set the item as something that would be either a gross or net item? If I were entering a window I could check that it was a net item. If I were entering framing lumber I could check it as a gross item and it would grab the waste factor percentage I had set.

Regardless I agree with the previous poster that even limited function would be a good start...

Michael

[Dennis]

Thanks for the feedback! It's always helpful to know that people really want a feature, before we program it. Seems likely we can get this into version 3.8.

We definitely could add something to Assemblies to specify how it calculates the quantity.

[wessongroup]

I'm retired and hanicapped... used your site to get an idea what my costs would be for pouring 1800 sq/ft of concrete, after taking the old out, dirt work, footing, forms and concrete.

Even if I'm off some, I don't think the cost per sq/ft should be off my the amount I'm getting back for bids on the work.

The number for doing the pour, using your numbers came out arond $12,000-$13,000 for all work to be done.

However, all bids are coming back at twice the number I came up with using your calculations. And I'm using $120 per yard for the concrete.

I'm in Southern California, Orange County and was told the cost per square foot for,in and out on the concrete is between $6-$8 dollars per square foot.

Being retired and handicapped I don't get out much anymore, and don't know anyone still in the trades so I can't ask anyone to see what the number should be.

I think your cost of $1.67 per square foot for the concrete is pretty close, but..... here in SoCal, the price seems to be based on some other factor that I'm unaware of at this time.

Thanks for any help ..................

[Dennis]

The Goldenseal assemblies are for the hard construction cost. That usually will be quite a bit less than a subcontractor's total cost in a bid.

Make sure the hourly cost of labor includes "burden"-- employer taxes, worker's comp, etc. Those can easily add 30% to 40% to labor costs. I'm not even sure how you'd figure in the extra cost of using "under the table" labor.

If comparing to a subcontractor bid, you'd need to add markup to cover the contractor's overhead and profit. That could easily add 30% to 60% to the overall cost.

If bidding a job, a contractor would probably add some other hard costs to a job, on top of the basic concrete work. There might be some setup and cleanup time, transportation time, site prep, etc.

A lot of subs will also bid high, just because they aren't good at estimating and want to leave a comfortable margin. Their bids may be based on plenty of things other than the hard costs.

BTW, back when we were Turtle Creek Construction, we often used the calculated estimates as a bargaining tool, when negotiating subcontract prices. Of course that's easier to do in a slow market, or when you have a long-term relationship with a sub.

[wessongroup]

Thanks for the insight...

I had spent a lot of time on this project, and had used R.L.Means Cost Estimating also.

When the numbers came back two and in some cases 5 times what one would consider resonable I thought I was missing something.

However, just yesterday... one of the 20 contractors the job was submitted to came back with a bid within 12% of the number arrived at orginally, albeit higher...

Thanks again for your time:D

[glbuild@verizon.net]

I'd be leery of using the lowest bidder just because his quote is nearest to the "right" number you calculated. Normally you want to hire someone from the middle of the pack, whose references are good and whose reputation and presentation suit you.
I like the way GS works, and these days look forward to doing my estimates. Still, I have rewritten and increased almost every cost item and assembly I have used. (My copy came last year with 2002 prices, so they needed updating anyway). My company builds toward the upper end of the custom market, and in kind of a seller's market, so our costs tend to be higher than, say, Ithaca, NY.
It IS nice when the sub's proposal comes in at your estimated amount, but in your case your estimated price sounds low.
Jim
(Twenty bids! You've been busy!)

[rjaley]

20 bids? Jeez. If a client tells us they are getting more than 3 bids/estimates we walk away. A decision made on price alone is usually a receipt for trouble. About once a year we are called in to finish a job where a low-ball contractor was thrown off the job.

Last fall we took over a small remodel, the client was an architect and had received a price that included, plumbing and electrical of $8000. After a week he knew what a mistake she had made and asked them to leave. He called us to complete just the framing, insulation, sheetrock and finish carpentry, he hired his own electrician, plumber and painter. Our total billing to him for that work was $25,000. I imagine the sub trades were another $15000 or so. How he ever thought that she could get all of that for $8000 is beyond me.

[Dennis]

BTW, getting back to the original topic, we're now working on the interface to create PO's from Estimates, and ought to have it ready for version 4.0.

We decided that just creating a PO in one swell foop didn't allow much room for judgement, so we're going to have an intermediate window where you can choose exactly which materials to include in each order.

It will look similar to the Bill of Material by Task report, but in an "action dialog" where you can mark off what you need to buy, and exactly how much you need. I think that solves the "gross vs net" problem, and any other judgement issues.