Business Management

The Benefits of Automating Estimating


Q: Next to contracts, estimates and proposals are the most important pieces of paper in my alarm business. How do I maintain an accurate estimate tracking system?

A: The security industry is one of the fastest growing but the management aspects of the industry are not caught up with the current business trends. Many companies are still relying on Word documents and Excel spreadsheets for the generation of estimates. These pieces of paper seem to be the most elusive when they are needed; they are the most frequently misplaced and lost papers within the companies today.

If you have 50 outstanding estimates and no way to track them, you will not be able to follow up and close the deals. The improper handling of estimates through disparate systems can cost a company upwards of $300,000 a year.

As a systems integrator you have to rely on salespeople to avoid estimating out technically unfeasible jobs. You can lose money on jobs due to a low amount of profitability built into the estimate.

Quote Approvals are a way to avoid these mishaps, so set up a Quote Approval process within your company. The ideal way to set up a Quote Approval process is through your software. In order to prevent salespeople from sending out unapproved jobs, industry-specific software programs give you password protected estimates. This enables you to have up to three levels of approvals before a quote is sent to a prospective client.

The first approval is that of a salesperson. The second is typically that of someone who is more technically inclined. The third and final approval level goes to someone who is checking profitability.

It is also ideal to find a program that will allow you to track approvals through internal notes. For example, once a technical person has finished approval, the software should be able to assign that quote to another person internally for approval. This way, all processes are not only finished on time, but there is accountability along the way.

A Quote Approval process significantly increases your overall profitability. The loss of an estimate is probably the most embarrassing situation a security company like yours, can get into. It is not professional. Worst of all, you have no forecasting of your job scope and therefore no idea on how much money you will be making or losing.

When using software to track estimates, you are able to keep on top of follow-up dates, always retain important proposal information such as cost details by material, labor, outside services, and miscellaneous costs. Estimate management allows you to also store proposals in a soft copy so that when a prospect calls in requesting changes or additional information, you are not going through paper piles or file cabinets. The estimate should be available through a click.

Another downfall to not having your estimates managed automatically through software is the loss or unavailability of a pre-job profitability estimate. This estimating system allows you to get a rough estimate on your labor, material, outside services, and miscellaneous costs before the quote is sent out for approval. The automation of estimating your jobs increases profitability, accountability, and overall efficiency of your business management.

VEERAL P. LAKHANI is a partner at Alarm Key. Headquartered in Bellmore, NY, Alarm Key is a Microsoft Certified software developer of business management and accounting solutions. Visit their site at www.alarmkey.com