How are allowances set?

How Are Allowances Set?

Overview

In Contractor Foreman, an allowance is a pre-determined amount of money allocated for a specific item or scope of work within an Estimate. Allowances help inform the customer how much budget has been allocated for a particular item and provide flexibility for product selection or upgrades.

Important: Contractor Foreman does not currently have a client selection section. This means that while you can include allowances in an Estimate as line items, they cannot automatically update based on a client’s choice of product or material. Any adjustments must be tracked manually via Change Orders.

How to Add an Allowance

Since there is no dedicated allowance feature, allowances are added as normal line items in the Estimate.

1. Open the Estimates Module

• From the main Menu, select Estimates under the Financial section.

• Locate the Estimate you want to add an allowance to and open it.

2. Add a Line Item for the Allowance

• Click Add Item to create a new line in the Estimate.

• Enter the item name (e.g., “Bathroom Vanity Allowance” or “Countertop Allowance”).

• Enter the allowance amount in the price field.

• Optionally, add a note in the description field to indicate that this is a budgeted placeholder rather than a finalized selection.

Key Notes

• Manual Tracking: Because allowances cannot be linked to client selections, any changes or upgrades must be manually tracked using Change Orders.

• Customer Communication: Make sure clients understand that the allowance represents a budgeted amount, and any overage will require additional approval or adjustments.

• Use in Estimating: Allowances are useful for items that cannot be finalized at the time of Estimate creation but must be included for accurate budgeting and total contract cost.

• Reporting: Allowances are included in the Estimate total, giving a complete financial picture even when exact selections are pending.

Best Practices

• Clearly label allowance line items in the Estimate so both clients and internal teams understand they are budgeted placeholders.

• Track actual purchases versus allowances using Change Orders to maintain accurate project costs.

• Use consistent naming and descriptions for allowances to simplify reporting and avoid confusion.

• Review all allowances during the approval process to ensure projected costs are reasonable and clearly communicated.