What are construction cost codes?
Construction cost codes are the defined list of codes that are used for tracking, managing, reporting on the amounts, quantities, budgets, profit, and other account information associated with the job.
Benefits of using construction cost codes
Quick and easy way to identify and analyze how money is spent on the project.
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 centers and problematic areas.
Gives structure and access for following the costs in real-time for setting more accurate and realistic estimates.
Let management have a clear overview and of the job 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 is primarily concerned with promoting improved construction practices via education and lobbying. The institute’s standard AIA Contract Documents are one of the institute’s key services.
What is construction progress billing?
Progress billing is a payment method that provides for regular payments throughout a schedule. This is usually used for large-scale and long-term projects. For example, construction companies bill their customers on an agreed-upon schedule where usually the payments are 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 be able to predictably and understandably bill for the works done. This means that some standardization is needed. It is even better if this standardization is provided by an organization that both of the parties trust.
Three of the most commonly used AIA contract documents are typically paired together. These are the G701 Change Order form, the G702 Application & Certificate for Payment, and the G703 Continuation Sheet form.
What codes to use for AIA construction billing?
There is no single set of AIA construction codes for construction billing. You can use the CSI MasterFormat, the NAHB cost codes, or go with 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 do decide to go with a custom coding system, please do check with your partners. You want to be sure that they accept your decision and are willing to use the alternative coding system.
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 how to structure your progress billing and your budget, do not hesitate to reach out to us at Planyard.
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