I often run into agencies that are confused about the difference between creating an estimate and scheduling.  Many times the confusion begins with their Agency Management System which requires that they enter the estimated hours on the estimate and the hours allocated to each staff member on the schedule.  To them, this seems like double entry.  I am a strong opponent to double entry, but I will argue that this is not the case in this situation.  The Estimate and the Schedule both have different purposes and different functions in an agency.  Here is an attempt to clarify the difference between each and why most Agency Management Systems have them as separate functions.

1.    What is an Estimate?

• An estimate lets the client know what it will cost them to get the job completed.
• Lets you track the actual time and expenses against what the client is expecting to pay or has paid.
• Gives you a guide to make sure that the project remains profitable – or at least lets you know ahead of time that it won’t be profitable.
• Accounts for the time and expenses you will be billing the client for.
• Have few changes once the client has approved the amount.  Changes are typically made due to changes in scope of the job.

2.    What is a Schedule?

·         A plan to get the job completed on time with the resources your have or need to have.

·         Tells your staff what steps they need to do to get the job done.

·         Tells your staff when those steps are due and how much time they have allocated to complete each step.

·         Allows you to plan your resources.

·         Allows you to see the workload of your staff.

·         No expenses are on an estimate – only the time needed to complete the job.

·         Includes ALL steps that are needed to complete a job – such as Internal Kick-Off Meetings, Writing the Creative Brief, and Client Approvals

·         Makes sure that the job is completed on time and on scope.

·         Is a very dynamic document that needs to be adjusted as workload and delays or accelerated completions are made.

·         Allows you to manage your resources and staff workload so that you can plan for down time and outsourced freelance needs.

Typically, there is a very fine dotted line between the Estimate and the Schedule.  The estimated time and expenses that are budgeted for on the estimate tend to be on the high side to cover any unexpected situations that may take more time or expenses.  Many times an estimate will even state that the estimate is within 10% of the actual costs of the job.  Most schedules are conservative on the hours allocated to each person –also to cover any unexpected situations.

Most Agency Management Systems will show you the approved estimated hours for each step in the schedule or at least each phase.  They do this so that you know not to schedule more hours than the client is willing to pay for.

The Mantra for increasing efficiency and profitability is to deliver you jobs On Time – On Scope – On Budget!

The Schedule makes sure you get the job completed on time.

The Schedule and the Estimate makes sure that you stay within the scope of the job.

The Estimate makes sure that you stay within the budget the client is willing to pay.

 

Both the Estimate and the Schedule should serve as learning tools for the agency.  As you track the actual time and expenses against both, you should become better at both.  You should perform a “Post Mortem” at the end of every job.  Part of this process should be to review what you did well and what you can do better next time.  This is an opportunity to determine if you need to estimate more or less hours on the next similar job.  And, you can see where the schedule needed to be repeatedly adjusted sot that you can better plan for the next job.