Creating Estimates In Excel vs. QuickBooks – What’s the Difference?

If you use QuickBooks for your accounting and you create your Estimates in Excel instead of within QuickBooks you loose out on job costing capabilities and so much more!

I often see and hear comments such as this as I browse the web or talk with potential customers for our software:

Right now we are using QuickBooks Contractor. It is ok for our accounting software but we are looking for something that works as an overall system for our office – CRM, estimating, job costing, proposals, work tickets and most importantly easy for my guys to use.  Right now we are using Excel for Estimates and invoices.

When I see and hear comments like this I get so confused – because QuickBooks does allow you to create Estimates, Proposals, and do Job Costing –  so I thought I’d attempt to write a short article to address this.

Creating Estimates in Excel vs. QuickBooks – Pros and Cons:

Excel is REALLY easy to use – anyone can quickly whip up an Estimate, Proposal or a Work Order., you can create some great looking documents that you are proud to hand to your prospective customer.  But that is about as far as you can go.

QuickBooks, on the other hand, if set up properly will allow you to create an Estimate, Proposal, Work Order, or an Invoice and perform job costing just by entering vendor bills, writing checks, entering credit card charges, and employee payroll.   You then can access all kinds of Job Costing reports and an Actual vs. Estimate Report – which allows you to see the difference between what you thought you’d make on the job vs. what you actually made.

But….QuickBooks requires more work on the front end and then proper training for your employees.

I think I just heard everyone groan!  There is no way that I can write a “short” article on the benefits of using QuickBooks to prepare these documents for your business, but I can provide you with some suggestions to get started.

  • Is the QuickBooks Estimate function turned on?  If not go to the Edit menu -> Preferences -> Jobs & Estimates -> Company Preferences tab -> set “Do You Create Estimates” AND “Do You Do Progress Invoicing” to Yes
  • Modify/Customize the  built in forms to meet the needs of your company using the Layout Designer, by downloading a pre-built template or by using the Create Form Design option.  All of these options are available from the Lists menu -> Templates -> and then clicking the Template button at the bottom of the window.
  • Create a FULL list of the services, cost codes and/or products your company uses for billing
  • Have a meeting – get EVERYONE involved – take that master list of products and/or services/cost codes and come up with descriptions that EVERYONE can agree on {letting them know that they can “tweak” it more to their liking later}
  • Go to the Items List and set up items that correspond to that master list of of the things your company does, creating Group Items or Inventory Assemblies if appropriate
  • Create an Estimate, a Proposal, or a Work Order using the entries in your Item List – print it out and see what everyone things of it.  If they are happy teach your Estimators how to use the Estimating function
  • When entering Vendor bills, writing checks, or entering Credit Card Charges use the Items tab and assign the cost to the job
  • Turn on time tracking, enter employee hours by Job, Service Item, and Payroll Item
  • Create a Progress Invoice from an Estimate for the current amount that you are billing the customer
  • Look at the Estimate vs Actual Report for a specific job and look at the report results

These suggestions are just the tip of the iceburg for taking QuickBooks from plain-Jane accounting to job-costing accounting.  Use the search box on our site and enter specific keywords for additional tips.

If you can’t get your Estimators to leave Excel, there is a 3rd party application Transaction Pro Importer – that will import your Excel based Estimate into QuickBooks for you and you can implement some of the other suggestions in this article.

I hope you’ve found this article to be helpful, if so please take a moment to leave a comment or ask a question – or share it on your favorite social networking site if you think others would find it to be useful.

2 thoughts on “Creating Estimates In Excel vs. QuickBooks – What’s the Difference?

  • Martha
    I haven’t tried this in a long time, but it used to work.

    To test it out, make a backup of your QuickBooks file and then create an Estimate (Estimates are non-posting so they won’t mess anything up), making sure that the date of the Estimate is say when you originally accepted or were awarded the job.

    You should then be able to run the Estimates vs Actual report.

  • Martha

    Hello Nancy! Thanks for the great topic. I have a question though, our former bookkeeper was entering invoices in QuickBooks without creating an estimate. Now when I wanted to run a report to track our expenses, I only have actual costs.
    is there a way to fix the issue without impacting our numbers or/and other accounts?

    Thank you.

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