Using Xactimate Profitably: Tips for Restoration Business Owners
If you’re in the restoration industry, chances are you’re already using Xactimate—or you’re required to. But while most restoration contractors rely on it to write estimates, few are using Xactimate strategically to protect their profit margins.
In this guide, we’ll show you how to use Xactimate for contractors in a way that improves accuracy, justifies pricing, and helps you stay profitable. Whether you’re dealing with insurance carriers, supplements, or direct-to-consumer jobs, these Xactimate tips will help you stop leaving money on the table.
Why Restoration Estimating Isn’t Just About Line Items
Xactimate is more than a pricing tool—it’s a negotiation tool, a documentation tool, and a business survival tool. The problem? Many estimators rush through it or rely too heavily on default settings.
Here’s what that costs you:
Missed line items = missed revenue
Incorrect quantities = underbilling
No justification = denied supplements
No O&P = eroded margins
To be profitable, restoration estimating needs to reflect the true scope and cost of the job.
Xactimate Tips for Higher Profit and Faster Approvals
1. Start with Solid Job Documentation
Your Xactimate estimate is only as strong as your documentation.
Take clear, time-stamped photos
Sketch detailed diagrams with moisture readings
Note cause of loss and affected areas in real time
Create daily job notes that support line items and labor time
Insurance adjusters aren’t on site—you have to paint the picture.
2. Customize Pricing When Needed
Xactimate’s default pricing database may not reflect current material or labor rates in your region.
Regularly update your local price lists
Manually adjust line item pricing when actual costs are higher
Justify all pricing changes with receipts or market comparisons
This ensures you don’t undercharge on high-inflation items like drywall, insulation, or skilled trades.
3. Don’t Skip O&P (Overhead and Profit)
Many contractors are afraid to add O&P in fear of a claim delay. But if the job involves multiple trades, you’re entitled to it.
Use the 20/10 split (20% overhead, 10% profit) when justified
Reference carrier guidelines when possible
Document multi-trade scope in the estimate narrative
Skipping O&P is one of the fastest ways to lose 30% of your margin on complex jobs.
4. Include All Legitimate Line Items
Missing items add up fast. Be sure to include:
Protective coverings
Travel time or mileage
Equipment set-up/take-down
Containment barriers
Debris removal, haul-off fees, and cleaning supplies
Even if a line item seems minor, if it costs you money or time, it should be in the estimate.
5. Track Estimate vs Actual Costs
Xactimate gives you the estimate—job costing tells you whether it was accurate.
Compare each job’s actual labor, material, and subcontractor costs to the Xactimate total. This will help you:
Refine future estimates
Spot trends in underpricing
Improve team training
Why Profitability in Xactimate Depends on Discipline
Using Xactimate profitably isn’t about inflating numbers—it’s about using the software as it was designed: to reflect the full, fair, and documented cost of restoration work. With the right processes in place, you can improve cash flow, reduce supplement disputes, and grow your bottom line.
Final Thoughts
Xactimate can either be a tool that erodes your margins—or one that protects them. It depends on how you use it. These Xactimate tips for restoration business owners are just the start of building estimates that hold up under scrutiny and support a profitable business.
Want to improve your restoration estimating process?
We help contractors use Xactimate data alongside financial reports to track real job profitability.
👉 Schedule a call with Kiwi Cash Flow