'We estimate it' is no longer an answer

How much material is sitting on your yard was, for a long time, your own business. An internal number, used for planning and for the balance sheet, and nobody really asked beyond that. That is changing.

Increasingly you have to not only have that figure but be able to demonstrate it. And the pressure is not coming from one direction.

Why the bar is rising

The main reason is not regulation, and it is not stricter auditors. It is simpler than that: it is now possible.

For as long as surveying a site accurately was expensive, slow and complicated, an estimate was a reasonable answer. Everyone knew it was an estimate, everyone accepted that, and nobody pressed. Not out of laziness, but because the alternative did not practically exist.

That has changed over the past few years. The moment an accurate survey becomes routine and within reach of any company, an estimate shifts from unavoidable to a choice. And choices get questioned.

That is the mechanism behind this whole article, and it also explains why the bar keeps rising rather than settling somewhere. Expectation follows capability, with a delay but inevitably.

Three directions the question comes from

In practice you see the same movement from three directions at once.

The first is the financial side. For many companies stock is one of the largest items on the balance sheet, and expectations around substantiating it are shifting. A figure resting on an experienced employee's judgement is not necessarily wrong, but it is not evidence either. In a review the question is rarely whether the number is correct. The question is how you arrived at it.

The second is the customer, and this one is most often underestimated. Buyers and clients increasingly ask for quantities to be substantiated, for the same reason as above: they know it can be done. Anyone who can demonstrate a delivered quantity with a dated survey is standing somewhere different in a discussion from someone who says it is roughly right.

The third is reporting in the broader sense. Material and waste streams are moving from operational detail to something you account for, towards supply-chain partners and towards oversight. As soon as something is reported it also becomes checkable, and different requirements then apply to where the number came from.

Why an estimate is not evidence

There is a distinction here that often gets muddled. An estimate can be perfectly correct. An experienced yard manager who has walked the same site for twenty years is sometimes remarkably close.

But evidence is a different thing from correctness. A figure only counts as substantiation when an outsider can check how it came about. And that is where an estimate fails, for three reasons that have nothing to do with craftsmanship:

• It is not dated to a verifiable moment: there is no record of the situation as it stood at the time
• It is not reproducible: nobody can redo the survey and arrive at the same result
• It depends on a person: another colleague arrives at another figure, and there is no way to establish who is right

That last point is the hardest in a conversation with an auditor or a customer, because it means there is no independent ground to fall back on. The number is only as strong as the trust in whoever produced it.

What does count as substantiation

Invert those three points and you have the requirements a survey has to meet to serve as evidence. They are strikingly basic:

• Dated: recorded at a moment, with the situation as it stood at that moment
• Documented: traceable how the figure was calculated from the survey, not just the result
• Reproducible: the same method produces the same result on repetition
• Independent of the operator: it does not matter who did it that day
• Comparable over time: last quarter's survey can be set alongside this quarter's

Note that accuracy is not even on that list. Accuracy is useful, but it is not what turns a figure into substantiation. A method that is consistent and traceable is stronger as evidence than a one-off survey that happened to be very precise.

A test you can run today

There is a simple way to work out where you stand. Take a stock figure from eighteen months ago and try to reconstruct how it came about. Not whether it was right, but how it was made.

If you can, you have a method. If you cannot, you had a number. That distinction is exactly what lands on the table in a review or a dispute, and it is usually the moment people realise they never recorded it.

Where most companies are now

In practice we mostly see companies who have the first part well in hand and not the second. There is always a figure, there is almost always somebody behind it who knows what they are doing, and it is used properly in the records.

What is missing is the layer underneath: the record the figure rests on. As long as nobody asks, that does not show. It shows the moment somebody does ask, and by then it is too late to arrange retrospectively: you cannot go back and survey last year's yard.

Which is the reason to look at it now rather than when the question arrives. Putting a method in place costs little; inventing substantiation afterwards is not possible.

How we do it

AiroMap is built on exactly that list. Every survey produces a dated 3D model of the site as it stood at that moment, with a calculation you can trace and a report you can file under your records. Because the process is automated, every survey is produced the same way regardless of who carries it out.

And on the point this article is about, we had it tested: the survey process has been reviewed and validated by a large independent accountancy firm as a basis for stock valuation in the annual accounts. That is not a claim of our own, which is precisely why it is useful when somebody presses.

Want to know how far apart your current figure and reality sit? We come over, survey a site and set the result alongside your records. That gap is usually the best starting point for this conversation.