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The cost code is used as a means of identifying the various types of costs that can be posted against a job. A cost code must be specified for all cost transactions posted against a job. Cost codes determine the degree of detail and analysis that you will derive from the Job Cost system. Cost codes can be defined for specific items or phases of a job, such as testing or fabrication.

Cost information for a job is detailed by cost code and cost type. For Subcontract cost types, the information is further detailed by vendor number. You can record standard unit cost and billing information for each cost code and cost type specifically for each job.

The Job Cost system allows for a wide choice of coding methods so that you can adapt your current coding method with a minimum of change. You can adapt your current manual coding method on an "as is" basis, or you can take advantage of the organizing features built into the Job Cost system.

You can use up to nine characters to define each cost code. Cost codes can be divided into one, two, or three segments. If a cost code is made up of only numeric characters, it is zero-filled automatically.

Although there are many variations, one of the following methods should fit your requirements.

 Using Cost Codes as Cost Categories

One method of organizing cost codes is to group them by similar cost types. Using this method, you can designate the first segment of the cost code as the cost category, representing a general class of costs for which to obtain totals. The second and third segments can be used to detail individual cost items within a general category.

An important aspect of this method is to assign only one active cost type to each cost code, which speeds data entry by eliminating the need to specify the cost type when entering cost codes.

This method of organizing costs is best suited for subcontractors and businesses whose expenses are primarily internal (labor and direct expenses). This method is not well suited for general contractors who need to track a large number of subcontractors.

 Example - Using Cost Codes as Cost Categories

This example demonstrates how to use cost codes as cost categories. The first segment of the cost code is used to identify general categories of costs such as labor (01), material (02), and subcontract (03). The second segment is used to identify detailed cost items. Each cost code is active (Y) for only one cost type.

Cost Code	Description	Lab	Mat	Sub	Brdn	Ovrhd
01-0100	Labor - Supervision	Y	N	N	N	N
01-0110	Labor - Electrical	Y	N	N	N	N
01-0120	Labor - Apprentice	Y	N	N	N	N
02-0100	Material - Standard	N	Y	N	N	N
02-0110	Material - Wiring	N	Y	N	N	N
03-0000	Subcontract	N	N	Y	N	N
09-0100	Burden	N	N	N	Y	N
09-0200	Overhead	N	N	N	N	Y

 

 

 Using Cost Codes as Phase Numbers

You can use cost codes to represent phase, subphase, and step numbers. Using this method, you can organize your jobs along a logical or chronological sequence of tasks that must be performed. The first segment of the cost code is used as the phase number. The second and third segments can be used to further detail the phase into subphases and steps. Some Job Cost reports can be summarized by phase.

You can "activate" multiple cost types that are relevant for each cost code to track all associated costs for each phase, subphase, or step.

This method of organizing costs is best suited for general contractors and other businesses whose jobs tend to be of long duration and whose costs are primarily external (performed by subcontractors).

 Example - Using Cost Codes as Phase Numbers

This example demonstrates how to use cost codes as phase numbers. The first segment of the cost code is used to identify the phase. The second segment is used to identify the subphase, and the last segment is used to identify the step. Each cost code can have one or more cost types activated, as appropriate.

Note Each phase has its own separate overhead and burden cost codes.

Cost Code	Description	Lab	Mat	Sub	Brdn	Ovrhd
01-010-00	Planning	Y	N	Y	N	N
01-020-00	License	Y	Y	N	N	N
01-030-00	Survey	N	N	Y	N	N
01-090-00	Planning - Overhead	N	N	N	Y	Y
02-010-00	Site Prep - Superv.	Y	N	N	N	N
02-020-00	Land Clearing	Y	N	Y	N	N
02-020-01	Land Grading	Y	N	Y	N	N
02-090-00	Site Prep - Overhead	N	N	N	Y	Y
03-010-00	Foundation - Superv.	Y	N	N	N	N
03-020-00	Cement	Y	Y	Y	N	N
03-030-00	Finish	Y	Y	Y	N	N
03-090-00	Foundation - Overhead	N	N	N	Y	Y

 

 Using a Combination of Cost Code Formats

You may find that your particular requirements fall somewhere in between the cost categories and phase numbers examples. For example, many businesses perform as a general contractor and a subcontractor on different jobs.

It is recommended that the first segment of the cost code (phase number) be used to separate cost codes used by one type of job from another. For example, phase number 090 may be used strictly for maintenance jobs and remain separate from cost codes used for normal contract jobs.

 Example - Using a Combination of Cost Code Formats

The following examples illustrate possible cost code formats.

	Segment Number
Cost Code Format	1	2	3
###	3	0	0
###-##	3	2	0
###-###-##	3	3	2
#####-##-##	5	2	2
###-###-### (default)	3	3	3

 

 

For more information, see Cost Code Maintenance.