Implementation Plan - Project Financials - Optional - Establish Master Cost Codes

One of the most important things a construction or engineering firm should do is standardize their cost code structure. This is independent of the software being used. For example, you will not be able to do any historical analysis very easily if the cost code for concrete or electrical changes every job. Plus, information needs to move from estimating to project management and then on to accounting in a very efficient manner. Otherwise, there is a lot of duplicate data entry or time wasted determining the appropriate code. This is why firms should schedule a meeting where key staff from every department including executives collectively decide on a standard list. Once finalized, this is then incorporated into Corecon and the accounting system. For Corecon, the coding structure can be up to four (4) tiers deep: division, major, minor and subminor. If the accounting or ERP system does not have a dedicated cost code feature then these should be entered as service items, not GL chart of accounts.

Having a standardized cost code structure allows data to be measured and analyzed accurately over time and spanning multiple projects. Analysis of similar data makes decisions accurate, understandable and timely. In other words, Cost Codes allow construction financial managers, executives, project managers, bonding underwriters, and other outside analysts the ability to see data 'apples-for-apples'. In addition, Cost Codes referenced on Client/Prime Contracts can have Estimated Cost Budgets and Contract Values. Thus, Corecon's financial dashboards can report projected and actual Gross Profit by Cost Code.

Cost Code Resources:

• Cost Codes Overview
• Master Cost Codes - Fequently Asked Questions (FAQ)
• Construction Industry Standard Classification Systems
• Importing a Master Cost Code from Microsoft Excel