Accurate cost coding is essential for managing project budgets, maintaining tax compliance, and the overall profitability of construction businesses.  Unfortunately, many businesses and contractors struggle to complete cost coding without a lot of headaches. This can create significant challenges for businesses across the industry.  

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Why is Job Cost Coding so Difficult?

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While the specific reasons job cost coding is so challenging can vary from company to company, here are 5 general problems that plague the majority of construction businesses. 

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Inconsistent Practices

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One of the most confusing aspects of job cost coding is that every team, department, and project manager has their own way of writing or interpreting cost codes - even within the same company.  This creates confusion and inaccurate data. 

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Manual Entry Errors

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Many contractors and project managers are still using pencil and paper to write down project cost codes in the field - where they may not have access to the internet or a computer.  While manual data entry has been practiced for decades, it is prone to mistakes, especially if the paper gets wet, or the writing smears. 

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Lack of Integration

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If manually entering data once poses a risk for error, having to repeatedly enter that same data increases the risk of errors.  Unfortunately, if there is no integration accounting and other systems, the same job cost codes are going to have to be entered manually for every single department.

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Lack of Visibility

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Because cost coding takes a lot of time, sometimes managers or contractors will set aside a whole day a week to update their cost codes. While this may seem more time efficient, it slows down decision making and could result in over shooting the project budget due to a lack of real-time visibility.

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Poor Communication

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Field workers are not the only ones who have to deal with cost codes. The accounting department needs to understand the data coming in from the project. The field staff needs to know how to correctly assign expenses. If communication breaks down, the whole system falls apart.

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What If Everything Could Be Automated?

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The good news about job cost coding is that it doesn’t have to be so challenging.  Outpave’s expense management platform helps you standardize, automate, and organize your cost coding processes to eliminate confusion and improve project  budget management.

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Contact us request a product demo today. Don’t forget to follow our social pages for more information about how our platform can help grow your business.

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