What are construction cost codes?
Construction cost codes are a defined list of codes used for tracking, managing, and reporting on the amounts, quantities, budgets, profit, and other account information associated with the job.
Benefits of using construction cost codes
Cost control
Quick and easy way to identify and analyze how money is spent on the project.
KPIs tracking
Track and manage KPIs such as estimated cost, cost estimate, current costs, and more.
Ideal for companywide use
Using the same codes companywide makes tracking and analyzing costs, errors, and forecasts for all stakeholders easy.
Visualize profit centers
End-to-end analysis for visualizing profit centers and problematic areas.
Estimating
It gives structure and access to follow the costs in real time to set more accurate and realistic estimates.
Real-time tracking
Let management have a clear job overview and keep all the stakeholders engaged.
What is AIA?
The American Institute of Architects (AIA) is a professional association with approximately 90,000 members who are licensed architects and other industry professionals. The AIA primarily promotes improved construction practices via education and lobbying. One of the institute’s critical services is its standard AIA contract documents.
What is construction progress billing?
Progress billing is a payment method that provides for regular payments throughout a schedule. It is usually used for large-scale and long-term projects. For example, construction companies bill their customers on an agreed-upon schedule, and the payments are usually made based on the progress made. The same goes for subcontractors who bill their “client,” who is the general contractor responsible for the whole project.
Both parties of the billing process must have agreed on a structure to bill predictably and understandably for the work done. This means that some standardization is needed. It is even better if this standardization is provided by an organization that both parties trust.
Three of the most commonly used AIA contract documents are typically paired together: the G701 Change Order form, the G702 Application & Certificate for Payment form, and the G703 Continuation Sheet form.
What codes should be used for AIA construction billing?
There is no single set of AIA construction codes for construction billing. You can use the CSI MasterFormat and the NAHB cost codes or a custom coding system. We recommend going with either the CSI MasterFormat or the NAHB cost code system so that every partner—client or architect—you work with also has the experience and recognizes your selected coding system.
If you decide to use a custom coding system, please check with your partners. You want to ensure they accept your decision and are willing to use the alternative coding system.
Conclusion
Since there is no single set of AIA construction codes for construction billing, you can decide between the three following options:
If you have any questions about structuring your progress billing and budget, do not hesitate to contact us at Planyard.