Why Job Cost Coding Matters (But is So Tedious)

Running a construction company involves complex tasks that hurt efficiency and are often so painstaking that no one wants to do them. Job cost coding is perhaps the most dreaded.

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Why is Cost Coding so tedious?​

Job cost coding assigns each project activity a specific number and code. The most common method has three components.

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1. The project number

This number identifies the job associated with an expense.

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​2. The cost code

This number identifies the type of work completed. Most companies use standard cost codes to keep coding simple and clear.

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​3 .The cost category

Cost categories describe the type of expense for each cost code.  The 4 most common cost categories for construction are labor, materials, equipment, and subcontractors.

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Every line item in a construction expense report requires a job cost code. Each job cost code must include each of these elements. Projects that have multiple phases or locations may have additional numbers included.  If the employee or contractor submitting the cost code misses an element or mislabels it, the accounting personnel will need to spend time correcting the mistake or tracking down the correct information.

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Why is Cost Coding Important?

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Unfortunately, the tedious nature of job cost coding doesn’t outweigh the importance of collecting the information.  Cost codes provide vital financial information that informs a wide range of business decisions made throughout a construction company. Accurate cost codes can be used to

• Compare the actual cost to the budgeted cost for each phase of a project.
• Identify cost overruns early.
• Produce accurate job reports for accounting and stakeholders.
• Improve bidding and forecasting for future projects.

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Inaccurate or missing cost codes create misinformation and incomplete financial records that make it challenging to ensure tax compliance or provide the information required for business growth.

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Outpave Makes Cost Coding Easier

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The most tedious aspect of cost coding is manual data entry and record keeping. Outpave eliminates the need for manual cost coding - making it easier than ever to have an accurate picture of project budgets without the worry of erroneous data.

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When you sign up for Outpave, we can customize the platform to include your cost codes. When a receipt or invoice is uploaded, you’ll be able to match the transaction to the appropriate cost code in seconds. The expense data then feeds into the reporting area, and you can monitor project spending in real time. No manual data entry, no Excel spreadsheets.

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Get Started Today

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If you’re ready to streamline your project cost coding process, contact our team today to schedule a product demo. Don’t forget to follow our social media channels for more information about how our platform can improve your expense management programs.

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