Project Cost Estimation Software

Project Managers and planners often need to create project budgets. This can be a tricky thing as estimating is more of an art than a science, both experienced and inexperienced project managers know that an estimate can go south quickly. Managing the project estimate process with software can help to make estimates more accurate by involving more people on your team, making sure calculations are accurate, and allowing your team to respond more quickly to project changes which are inevitable.

How to estimate a project

You will want to start first by gathering all of your tasks to be done and putting them into larger buckets so that you can better organize the project. These buckets could be timeline based, grouping tasks by the phase that they will happen in the project. Or they could be people based, grouping tasks by who or what team is going to do them. There are a number of ways to group things, but that helps to make a project estimate easier to read.

As you are adding in all of your tasks make sure to define them well. You will want to be clear about what this task is and how it will be done. Break larger tasks down in the smaller pieces if you can! If possible add notes to make things even more clear for the readers.

Finally you will want to assign people (or internal roles) to each task. Define exactly who will be doing the work and how long it will take them. Be sure to think about everyone involved! It’s easy to think “only developers will be doing this task”, but that often doesn’t consider the managers and others who will review the work and give feedback. Try not to make up time estimates for roles that you don’t understand, or if you do run your estimates by those who will be doing the work. The more feedback you get on your estimate the more accuracy you will have!

It can help your estimate to be more accurate by thinking in ranges of time rather than exact estimates. For example a task might take the designer 4-8 hours. This shows you a low and a high value and gives you some room for error. Another way to ensure greater accuracy is to use a 3 point estimation method where you estimate the low (optimistic), middle (most likely), and high (pessimistic). Using the PERT formula you can arrive at an estimate that you can feel more comfortable with.

Software for Project Estimation

There are a number of invoicing tools that have the ability to first create an estimate. These can be things like Xero, Freshbooks, Harvest, and others. These allow you to add the tasks like we mentioned, but may not allow for uncertainly because they don’t offer the ability to estimate in ranges like we talked about above. An estimate is not just an invoice by a different name.

We recommend an estimation tool like Simple Estimate that allows for uncertainty in your budgeting. It allows you to do One, Two, or Three point estimating. In addition you can add Markup percentages on top of your estimate to allow for some wiggle room. It allows you to export your estimates in a number of useful ways like PDFs, web shares, or Excel files. You can invite your whole team into the tool and work with them to create your ideal project estimation process.