Implementation plan - Project financials - Establish master cost codes (optional)

Define and standardize a master cost code structure so financial data flows consistently from estimating through project management and accounting, enabling accurate reporting and analysis.

One of the most important things a construction or engineering firm should do is standardize its cost code structure. This is independent of the software being used. For example, you cannot perform historical analysis easily if the cost code for concrete or electrical changes on every job. Information must move efficiently from estimating to project management and then to accounting. Otherwise, teams spend time on duplicate data entry or determining the correct code. Schedule a meeting with key staff from every department, including executives, to collectively define a standard list. Once finalized, incorporate the structure into Sage Construction Management and the accounting system. In Sage Construction Management, the coding structure can be up to four tiers deep: division, major, minor, and subminor. If the accounting or ERP system does not include a dedicated cost code feature, enter these as service items, not as general ledger chart of accounts.

A standardized cost code structure allows data to be measured and analyzed accurately over time and across multiple projects. Comparing consistent data improves decision making and supports timely, understandable insights. Cost codes allow construction financial managers, executives, project managers, bonding underwriters, and external analysts to review data on an apples to apples basis. Cost codes referenced on client or prime contracts can include estimated cost budgets and contract values. Financial dashboards can then report projected and actual gross profit by cost code.