# Building an Estimate The estimate is where you project what you plan to charge and what you plan to spend. Those two numbers — and the gap between them — are what PAI tracks throughout production. Build the estimate carefully, and PAI will always be able to tell you how reality compares to what you planned. The estimate is the baseline; everything downstream is measured against it. This doc covers the mechanics: adding line items, setting quantities and rates, and understanding how PAI calculates costs. For the different views you can use while building (Sheet, Days, Timeline), see [Estimate Views](./Estimate-Views.md). For modifiers (fringes and markups), see [Modifiers](./Modifiers.md). --- ## Adding Line Items Line items are the building blocks of an estimate. Each one represents a single service, resource, or deliverable — an editor, a day of studio time, a licensing fee. All line items in PAI come from the rate card. To add one, click **Add Line Item** in Sheet View and search by name. If the item exists, select it — it arrives pre-populated with its default department, category, unit type, and rates. If it doesn't exist, type the name and create it. Creating a new item adds it to the rate card automatically. Once a line item is added to an estimate, you can configure it for that estimate — adjust quantities, rates, notes — without affecting the rate card. When you've arrived at a rate configuration worth saving, use the **Save Rate to Rate Card** option in the line item's action menu. This saves that specific rate configuration back to the item on the rate card for future use. > [!tip] > Line item names come from the rate card and are fixed once set. If you need a different name, create a new item. For rate variations of the same item (different day rates, different configurations), use the action menu to save those as rate card entries. --- ## Line Item Fields Each line item carries metadata that determines how it's organized and calculated: - **Name** — the item name, sourced from the rate card - **Department** — which department the item belongs to. Used primarily to organize line items in Sheet View and financial summaries; departments feed into financial totals as an added benefit. - **Department Group** — the higher-level grouping: Agency, Creative, Prep, Production, Wrap, Post, Media - **Category** — organizes items by cost type and tells PAI how to handle billing for expenses in that category (Labor, Equipment, Facility, etc.) - **Unit** — the unit type: Days, Hours, or Flat - **Min Hours** — for Day-unit items, defines the standard day length. - **Account number** — auto-assigned from the rate card; used in financial reporting - **Revenue Recognition Category** — accounting metadata for financial reporting - **Internal Notes** — private notes visible only to your team; never appear in externalized documents - **External Description** — appears on printed estimates; use to describe what a line item includes for the client --- ## How PAI Calculates Cost Every line item uses the same formula: **QTY × UNIT QTY × RATE = Subtotal** This runs separately for external and internal values. - **QTY** — the number of unique instances. Two editors = QTY 2. - **UNIT QTY** — how much of the unit type applies to each instance. Four days each = UNIT QTY 4. - **External Rate** — what you plan to charge (your price to the client) - **Internal Rate** — what you plan to spend (your actual cost) The difference between the external subtotal and the internal subtotal is the **margin** on that line item — what you plan to make. When those rates are the same, margin is zero; when external exceeds internal, you're building in a return above cost. ### Example An editor at an external day rate of $900 and an internal rate of $750, working 4 days: | | Calculation | Result | |---|---|---| | External (price) | 1 × 4 × $900 | $3,600 | | Internal (cost) | 1 × 4 × $750 | $3,000 | | **Margin** | $3,600 − $3,000 | **$600** | Because this is an estimate, all of these are **projected** amounts — you're planning to charge $3,600 and planning to spend $3,000, for a projected margin of $600. That projection becomes the baseline PAI measures against when the job is live. The Live Margins panel shows you, in real time, whether actual spend is tracking with what you planned. Margin represents what you expect to make on a given item or the project as a whole. That might be profit, overhead recovery, a contingency buffer, or something else depending on how your organization uses it — the label matters less than the discipline of projecting it and tracking it through production. --- ## Unit Types The unit type you assign to a line item changes how it behaves throughout the system — not just in the estimate, but in the budget and calendar too. **Days** — the item can be scheduled on specific calendar dates. It appears in Days View and Timeline View, creates logical day entities in the system, and can generate call sheets when the project is activated. Use Days for any resource that's engaged on a per-day basis. **Hours** — the item cannot be scheduled to a specific date. It's treated as a project-wide resource. Use Hours for time-based costs that don't correspond to individual production days (e.g., editorial time billed by the hour across a multi-week engagement). **Flat** — a fixed cost that doesn't scale with time. QTY × 1 × RATE. Use Flat for licensing fees, delivery charges, project fees, or any cost that's a set number regardless of how long the project runs. > [!important] > Only line items with the **Days** unit type can be scheduled in the calendar views. If a resource needs to appear on specific production dates, use Days. Hours and Flat items are project-wide and don't appear in scheduling views. --- ## Rates and Min Hours Rates come from the rate card when you add an item and can be adjusted freely within an estimate. Changing rates in the estimate doesn't affect the rate card. **Min Hours** applies to Day-unit items and defines the agreed length of that day's engagement — how many hours this rate covers. It prints on the estimate, making it an explicit part of the bid: this resource is engaged for 10 hours, not 11. That specificity is intentional. On the client side, hours beyond the min can become an overage. On the vendor side, they can become an overtime claim. Either way, PAI needs the number to know when the agreement has been exceeded. The organization sets a default (typically 10 hours), which pre-fills at project creation; you can override it in the project creation modal and change it on individual line items at any time. --- ## Modifiers Once your line items are in place, you'll likely want to account for costs that sit on top of individual line item rates — things like taxes, insurance, agency fees, or a production markup. PAI handles these through **Modifiers**, which are percentage-based adjustments that can be applied across the estimate at different levels of specificity. Modifiers come in two types: **Fringes** and **Markups**. Both run on external and internal values independently, so you can model pass-through costs, margin-generating markups, or internal-only costs depending on how you configure them. For a full explanation of both, see [Modifiers](./Modifiers.md). --- ## Sidebar Panels While building an estimate, the project sidebar gives you additional context and configuration options. Open it with the sidebar button at the top right of the project view. **Project Scope** — a rich text area for statement of work details, project schedule notes, and general descriptions. Content here appears on externalized estimate documents. **Billing Notes** — payment schedule, terms, invoice timing. Also appears on externalized documents. **Internal Overview** — private notes visible only to your team. Never externalized. **Live Margins** — a real-time financial summary that updates as you build. Shows the grand total (external and internal) and the margin between them — broken down by category, department, or line item depending on which level you select. This gives you both the full picture of what you're billing and what you're expecting to spend, alongside the margin that results. It's PAI telling you, as you build, whether the numbers are where you want them. **Comments** — project-wide threaded comments available across all estimate versions. Tag users with @ to notify them. For a detailed breakdown of the financial panels, see [Live Margins](../06-Financial-Visibility/Live-Margins.md).