What Are Construction Cost Codes?
Construction cost codes are a defined list of codes used to track, manage, and report amounts, quantities, budgets, profits, and other job-related data.
These codes streamline companywide data management for all stakeholders, including estimators, project managers, and accounting.
They should be used for forecasting and contracting to cost management and accounting, ensuring full project visibility and allowing error detection and data reuse.
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 it easy to track and analyze costs, errors, and forecasts for all stakeholders.
Visualize profit centers
End- to end-analysis for visualizing profit centres and problematic areas.
Estimating
Gives structure and access for following the costs in real-time for setting more accurate and realistic estimates.
Real-time tracking
Let management have a clear overview of the job and keep all the stakeholders engaged.
Job Broken Down to Smaller Deliverables
Work can be broken down using a project’s construction cost codes to divide tasks into smaller deliverables (e.g., foundations, installations, facades).
Planyard recommends following the chronological order of jobs. Structuring costs by on-site activities helps management track profitability in phases. By mid-project, you can see whether the initial phases, like foundation work, were profitable.
Construction budget structure
Construction cost codes should link together the project forecast and costs management with the job tasks and structure. The cost codes should have a recognizable structure, from the overall project level to individual jobs and accounts.
On the right you can see the External Installations category broken down to account level.
Budget Managed From an Estimate, From Job Costing to Project Income
Additionally, it’s smart to list the budget with the cost paid by the customer to enable job profitability tracking on an article level.
To what level should you break down construction cost codes?
There is no one answer to this question. You should start by tracking the level of detail needed by various stakeholders. Following the costs in too much detail makes reporting a time-consuming task for the project managers and adds complexity to the cost analysis process.
NB! It’s important to keep in mind that there are a number of stakeholders involved in cost code management. All the stakeholders should be involved in selecting the appropriate cost codes structure.
- Important to think about who will be using the cost code information
- Project managers are interested in getting the work done and should have control over the budget with as little time spent on reporting as possible
- Accounting is interested in following costs by each account
Managers should be able to concur with tracking errors, accountability, and profitability - Estimators for future estimates need to be able to track the real costs of current jobs
Where to get a list of construction cost codes?
Planyard contractor software helps ambitious teams smash their targets and accelerate their growth.
- No more spreadsheets
- Saves project managers’ and QSs’ time
- Easy to implement and use
- Real-time and accurate financial forecasts
- No more duplicate data entry
