Once you have an approved scope and a contract with your client, it’s time to create a project budget. I am always surprised by how many contractors utilized tools such as Xactimate and don’t use all of its capacities. You can go deep into the weeds with any software, but the purpose of this article is to take a quick run through a restoration repairs budget using Xactimate.
Your restoration repairs budget will only be as good as your Xactimate estimate
Once you have written your detailed estimate, supplemented with thorough documentation following the principles we talk about in Be Intentional: Estimating, it’s time to put the plan to work. When you sketch accurately, you enable yourself to efficiently create and extract relevant project information including quantities of materials, estimated labor, and even the project duration.
Restoration repairs budget materials lists from Xactimate
Depending on how detailed you want to be with your budget, this report gives you a deep dive into the materials assumed with the estimate line items. You have a count of framing nails and/or drywall screws at your fingertips. For most projects, I will highlight the larger quantity line items and extract my main data from these. For example, I am looking at an estimate that has a nearly $500 line item on a page where only a few others break $100. This item happens to be a 3 linear foot (LF) vanity, which is an item we will want to note in our materials budget.
If you are separating materials and labor for tracking, or in the event that you are subcontracting portions of your work, you will have to decide how in depth you want to break these items out.
The components list is also helpful for checking your quantities for materials such as flooring, insulation, and drywall. On this page I have 83.25 square feet (SF) of snaplock laminate. If your flooring is 30 SF per box, you can determine how many boxes you need to order. If you estimated to replace the transition strip in multiple rooms, you will also know how many linear feet of material you will need. Before you take the unit price and give that to your client as their materials budget, go back into your components within the estimate and understand the breakdown of labor, burden, materials, etc. Seth Harrision of Actionable Insights has many helpful videos, including this one covering an Xact Hack for creating a materials budget.
To observe the cost factors:
Restoration repairs labor budget from Xactimate
While still in the components print out, you can scroll down to observe the labor quantities by work category, Xactimate unit price, and labor factor totals. Using these figures you can cross reference the labor for each of the scope categories. For finish carpentry (FNC), which is for “Carpenter - Finish, Trim/Cabinet”, we have 7.30 hours based upon the assumptions of the software for this estimate.
Restoration repairs project budget from Xactimate
Recap by Category assembles all of the line items from each room and combines them into core groups. Each of these line totals include materials and labor. If you are creating a budget, this is likely the report that you will want to start with. If your company is built so that you work for less than 20% overhead and profit, then this sheet may be all that you need. Otherwise, you will need to use these numbers to compose your plan.
A simple format for budgeting includes taking the line item totals provided in recap by category, subtracting your profitability goals, budget for project management time, and build in a buffer. You can do this on scratch paper, a simple spreadsheet, utilize budgeting software, or use a program that integrates with your estimating tool of choice.
Restoration repairs project scope from Xactimate
Another good resource from Xactimate is the scope report. This will provide you with a resource that you can print out and post in each room of your project so that everyone on your team is on the same page with regards to what the approved scope is. Too often only the estimator knows what the scope is and that information is not downloaded to the production team. By training your team to read and understand your estimating document you have a better chance of continuity in your workflow and combating the costly effects of scope creep.
1/24/2023 12:01:57 pm
I appreciated you pointing out that planning the work allows you to have a detailed estimate. My friend is handling a project that involves Xactimate estimates. I should advise him to hire a contractor specializing in insurance supplements.
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