Price study software: costing software to help you calculate the cost price and the selling price
Price study software is a commercial management computer program which aims to help you define the price (or cost) of a work or product and then define a selling price.
The latter will be used to provide a quote to your client, or a commercial proposal.
The purpose of the price study is to estimate the cost price of a project or work by budgeting:
• Human resources,
• Material resources
• Purchases of materials (or goods)
• Purchases of services external (such as subcontracting).
For which sector of activity?
This type of software can be used in different sectors of activity: construction, industry, engineering, etc. Whenever there are complex quotes to be produced.
Calculation of the cost price
It is by doing this calculation that we are able to determine a cost price which is the minimum to be respected if the company wants to avoid selling at a loss.
The price study software aims to facilitate this estimate by detailing in detail each sub-assembly of the project (Work Breakdown Structure) and entering for the different types of costs (purchase of goods, salary charged, use of equipment …) for each of them.
You will be able to indicate the cost of materials, but also the human costs according to the profiles involved (TJM), or the cost of the equipment (purchase cost, asset depreciation, maintenance).
This cost data can be entered directly into the software or imported from external databases, whether stored on the company's servers (ERP, price database) or accessible to third parties via API (like Batiprix for construction).
At the crossroads between project management software and quotation software (and much more advanced), price study software allows you to have a complete view of the resources to be allocated to the project and their costs.
Calculation of the sale price: management of margins, contingencies and risks
Once the cost price (or cost) has been calculated, the price study software helps you calculate the final selling price, by applying a margin rate and taking into account the risks of changes in costs.
Margin calculation
Calculating the margin makes it possible to establish the sales price, by applying one of the following rates (ratios):
• margin rate (commercial margin / cost)
• brand rate (share of the margin in the sales price ), to calculate the selling price based on the brand that the company wants to achieve.
You will therefore apply a margin coefficient (multiplier coefficient) which will allow you to achieve the desired level of profit margin on the final price.
The pricing software allows you to apply different margin levels to the different items (materials, human, equipment, etc.) to take into account the complexity of the work or product.
In the case of a call for tenders, where the final price is more constrained, the pricing software allows you to quickly identify the remaining margin level before making your offer.
Taking into account hazards and risks
Costing software must also allow you to take into account changes that may occur after the estimate has been established.
During the project, and particularly on tailor-made and very technical projects, you may encounter complications which require the use of other types of materials, specific equipment or even specialized human skills. Price study software allows you to easily apply these changes and recalculate costs and margin levels.
On long-term projects, taking inflation into account is important, because it can have a strong impact on your margin level and your cash flow.
Likewise, in an international context, taking into account changes in exchange rates is essential to maintain the desired margin level.
By allowing you to manage these parameters, price study software allows you to quickly adjust and recalculate your costs and measure the impact on your margins.
What are the advantages of pricing research software?
Saving time
Pricing software is above all a productivity software package. If you don't find it saving time, then you might as well continue to do your calculations with EXCEL.
“Pricing software should save you 40 to 70% time on the price study of your projects”
Thanks to connectivity to other databases, the possibility of reusing data, correcting data according to hazards, working with others on the data without the risk of corrupting it, good price study software should help you. allow you to save 40 to 70% of time when establishing the sales price of your projects, even the most complex.
Reduction of errors
Thanks to the standardization of the costing process, price study software makes it possible to avoid the errors found with traditional tools: rounding problems, poorly configured macros or formulas, alteration or erasure of data (especially in the case of team work).
Margin control
Saving time and reducing errors are two factors that improve operational efficiency and therefore the company's margin. With price study software, you go further by using it as a financial management tool to monitor your margin levels and anticipate risks (inflation, change in the exchange rate, etc.).
How to choose your price research software?
Many solutions are available on the market and it is not always easy to navigate. Here we indicate 5 criteria which we believe are important for your choice.
The flexibility of the software
In many cases, the first version of a quote or pricing study will be an approximation because project information is only partially available. However, having a first vision of the final cost (and sales) price allows you to know if the company can position itself and therefore continue the study.
Good pricing software should allow you to establish a partial study and complete it as new information (expected or not) becomes available. The format of the study must therefore not be fixed, but extremely flexible.
Software that can be easily configured by professionals
Price study software is above all business software. It is therefore important that encryption specialists are able to configure it easily without the need for technical (IT) expertise.
Provided that the solution chosen complies with security requirements, this allows on the one hand to relieve the IT department, who is generally not a specialist in all of the company's professions and is busy with numerous other projects.
On the other hand, to allow users (and especially expert users or “Key Users”) to have extensive and progressive functional coverage over time, to be able to react quickly (or anticipate) customer needs.
These are the reasons why it is preferable to choose dedicated pricing software, which will interface with the company's ERP, rather than trying to ensure that the ERP is able to manage price studies. complex.
The ability to work with the client and company vision
When you work within the framework of a call for tenders (private or public), you are forced to respond in accordance with your client's format. You must therefore adapt your costing method to that of the client, which makes you less efficient.
Good price study software should allow you to reconcile the two views (client and company):
• You import the client's file (Excel, DPGF) and associate its columns with those you usually use.
• You do your encryption according to your method (you are therefore more efficient)
• Once the encryption is done, you export it to the client's format to send to them.£
The ability to reuse elements
Even when we work on custom products or works, there is always a part of the latter that we can find on other projects.
Rather than re-entering all the information, efficient software will allow you to reuse models, or even create configurators to allow users to save precious time.
The ability to quickly edit commercial offers
Many price studies aim to be able to be integrated in the form of a quote into a commercial proposal published by the salesperson or business engineer.
Good price study software should allow you to generate in a few clicks the commercial proposal integrating both the common and usual elements (presentation of the company, T&Cs), but also specific to the project including detailed pricing.
Discover the most powerful price research software on the market
Quick-Devis solution , the most powerful price study software on the market.
We work with many industrial, engineering and construction groups to analyze and optimize their pricing practices, configure the software and train users.
To find out what Quotex and QDV can do for your business, make an appointment for a 20-minute videoconference demonstration interview.
