5 Best Practices for Job Cost Coding

Is your construction business operating on razor-thin margins? Do you feel like your finance teams are constantly at odds with the crews in the field? It could be that your job cost coding is overly complicated.  Here are some best practices to increase efficiency and improve cohesion throughout your company.

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Standardize the Coding Structure

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One of the main sources of contention between finance teams and field crews is a lack of standardized job cost codes.  The field crews have the codes that they write down on the invoices and hand into the accounting team. The accounting team then attempts to match those codes to a different set of codes used to allocate funds and organize project budgets.  Talk about chaos!

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Creating a systematic job cost coding program that is used by both field crews and accounting teams ensures that everyone is speaking the same language.  This creates stronger communication, more organized budgets, and cuts down on overspending.

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Align Codes with Specific Project Phases

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A standardized system only helps if the codes provide useful data. If you code for the whole project, you may overspend on phase one and run short for phases two to five.

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Aligning cost codes with different phases of each project helps organize expense data to expose problem areas of spending or where budgets might need to be tweaked to ensure there is enough available for the next phase of the project.

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Train Your Teams

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Now that you have a standardized cost coding program that aligns with project phases, it is time to train your teams.  This is where many construction companies struggle to follow through.  It takes a lot of time to train both the finance team and the field crew to use a new system.  Many managers see this time as time lost on the job site.  So they send out a memo to everyone and call it good.

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Taking time to train everyone on the new system may seem to reduce immediate productivity. But, getting everyone on board saves time and money long-term.

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Integrate Cost Coding

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Even if you have a well-trained staff, manual data entry of cost codes into the accounting software increases the risk of errors.  These errors can result in overblown budgets, project delays, and even issues with tax compliance.  Using an expense management platform, like Outpave, is one of the easiest ways to integrate your standardized cost codes into the accounting software.  The codes are assigned to expenses at the job site and then sent over to the accounting program automatically - making it easier than ever to allocate expenses and keep the books organized.

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Review the System

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Once your business has a system that works, you still need to take some time to review it and make sure it is working with your current projects, and refresh everyone’s memory on how the system works.  To keep everything running smoothly, it is recommended that you evaluate your job cost codes at least once a year.

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Integrate Your Job Cost Coding Today

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If you’re ready to improve the efficiency and accuracy of your job cost coding procedures, Outpave is here to help.  We can customize the platform for your specific code structure - making it easy for field crews to assign codes to every single expense in the field.  Then all the accountant has to do is review the expenses in the accounting software. Plus, you’ll have access to real-time analytics and reports. So you can always know what is happening with your current project spending.  

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Visit us online at outpave.com to schedule a product demo today. Don’t forget to follow our social media channels for more information on how our platform can improve your expense management.

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