The Difference Between ‘Estimate at Completion’ and ‘Estimate to Complete’

‘Estimate at Completion’ and ‘Estimate to Complete’ in financial forecasting

sage 300 estimating

Construction projects don’t always run on time, so construction and real estate companies must adjust their estimates as project variables change. When that happens, you need to know the difference between ‘estimate at completion’ and ‘estimate to complete.’

WHAT IS ESTIMATE AT COMPLETION?

An estimate at completion differs from a projected budget, as it takes factors such as the costs of building materials and contract labor into consideration. For example, if labor was budgeted at $20 an hour for a team of four, but a team of five was deemed necessary to complete the project on schedule, the estimate at completion would be updated to account for this change.

WHAT IS ESTIMATE TO COMPLETE?

An estimate to complete predicts how much money is necessary to finish a project by taking a snapshot of how much money has been spent to date, how much project work has been completed, and previously-unaccounted-for variables; it then looks at the unfinished work and determines from there. An estimate to complete is essential when construction projects aren’t completed on time or go over budget, as they offer a macro view of the situation.

COMMUNICATING WITH CLIENTS

As construction projects develop, it’s necessary to keep clients abreast of deviations from the estimated budget. Forecasting these expenses using an estimate at completion or estimate to complete are two ways to communicate budgets to a client using actual costs.

Users of Sage 300 CRE or Sage Timberline may find it easier to tackle these topics when using the Cabbage add-on. Cabbage’s real-time processing streamlines the development of up-to-date forecasts, which makes generating an estimate at completion easier and more accurate because it builds the report from the most current list of actual costs. Contact us today for more information.