What is the difference between Selections, Options, Allowances and Variations?

Understanding Variations, Options, Allowances, and Selections

Overview

In Contractor Foreman, Estimates can include several types of configurable items that define how costs, materials, and customer choices are managed during the bidding and approval process. Understanding the difference between Variations, Options, Allowances, and Selections ensures you create more accurate Estimates and set clear expectations with your clients.

These categories allow you to specify what the customer can choose, what has been pre-selected, and how changes in those choices will affect the total contract amount.

Variations

Definition:
Variations are specifications that do not change the price of an item. They are typically details that refine how a particular material or product will be used but do not affect the total cost.

How it Works in Contractor Foreman:

• Variations are added within the CID (Custom Item Details) section as part of a Material item.

• The Contractor Foreman user selects the desired specification before sending the Estimate for approval.

Example:

• Paint Colour: The material (paint) is already priced in the Estimate, and the user simply selects the colour (e.g., “Cloud White” or “Warm Beige”) without changing the cost.

• Roofing Shingle Type: The type or style of shingle (e.g., “Architectural” vs. “Three-Tab”) is chosen, but the price remains the same.

Options

Definition:
Options are specifications where the customer chooses between two or more alternative items, each with its own price. When the customer selects an optional item, the price of that item is added to the Estimate.

How it Works in Contractor Foreman:

• Options can apply to Material, Labour, Equipment, Subcontractor, or Other items.

• Each item is listed in the Estimate with its corresponding cost.

• When the Estimate is submitted for approval, the customer reviews the available options and makes a selection electronically.

Example:

• Countertops: The Estimate might include both “Granite Counter ($4,500)” and “Laminate Counter ($2,000).”

• The customer chooses the preferred option during the approval stage.

• The selected item is then added to the final contract price.

Allowances

Definition:
Allowances represent budgeted amounts included in the Estimate for specific items that the customer will later choose. The allowance amount forms part of the Estimate total and indicates how much has been allocated for that particular item.

How it Works in Contractor Foreman:

• The builder includes an allowance line item in the Estimate (e.g., “Bathroom Vanity Allowance – $6,000”).

• This lets the customer know how much is available to spend on that item.

• If the customer chooses an item that costs more than the allowance, a Change Order is issued to account for the price difference.

Example:

• The Estimate includes a $6,000 allowance for a bathroom vanity.

• The customer later chooses a vanity worth $7,000.

• The builder issues a Change Order for $1,000 to cover the difference.

Selections

Definition:
Selections are items that the customer must decide on during the bidding or estimating process. Once the customer makes their selection, the associated price is added to the Estimate.

How it Works in Contractor Foreman:

• The Estimate may initially include a placeholder item with a cost of $0, indicating a pending customer choice.

• Once the customer selects the desired item or specification, the builder updates the Estimate with the actual price.

• After the Estimate is approved and converted into a Project, any further changes are handled through Change Orders.

Example:

• An item called “Flooring” is listed at $0 in the Estimate.

• The customer later chooses hardwood flooring for $8,500, and that cost is added to the Estimate.

• Any future flooring changes (e.g., switching to tile) are handled through a Change Order.

Summary

Best Practices

• Clearly distinguish between Variations and Options to avoid confusion during client approval.

• Always include Allowances for major client-driven items to maintain pricing transparency.

• Document all Selections and follow up promptly to prevent project delays.

• Use Change Orders for any price differences arising after project approval.

• Ensure all client choices are updated in the Estimate before converting it to a Project.