Construction cost codes are commonly used on job sites, but if you’re new to the construction industry, you may be wondering what these numerical values mean and how construction sites benefit from using them.
Here’s everything you need to know about cost codes, and how the SmartBarrel device can help you effectively enforce, organize, and manage them.
What are construction cost codes?
Cost codes for construction projects are standardized and numerical values that indicate the type of work being done on a project. For example, ‘09 90 00’ can be used as shorthand to refer to ‘painting and coating’ tasks.
Not only do cost codes allow professionals to separate work into distinct divisions, but they’re also used to categorize and organize expenses. By using cost codes, construction firms can accurately conclude how much certain aspects of a project cost, and whether the costs correspond to what was originally budgeted.
Cost codes are based on the pricing of specific activities on a job site, and are used in budgeting, work documentation, cost tracking, and spend analysis.
What are the benefits of using construction cost codes?
A cost coding system in construction is a reliable, fast, and easy way to account for labor and material expenses. Here are the main benefits of implementing and using cost codes.
Standardization of data creates clarity
Standardized coding ensures that everyone knows exactly what’s being accounted for, eliminating ambiguity by communicating specificity.
For example, if a worker wants to determine the total cost of tiling materials for a project, simply inputting ‘flooring’ creates confusion for other workers and can prevent management software from properly categorizing expenses.
It creates more work and trouble to ask: what kind of flooring is being accounted for? Carpet, wood flooring, or tiling? Does this cover the labor involved with getting the tiling work done, or only the cost of materials? Using a specific cost code, 09 30 13 for the cost of ceramic tiling, eliminates this confusion and lets you track expenses more precisely.
With project finances organized into manageable, distinct categories, cost tracking is more accurate and accounting becomes much easier.
Improved resource and job costing management
Cost codes for construction projects are also useful for managing a project’s resources, letting you weigh material and job costs against outcomes for better management decision-making.
By using cost codes to categorize expenses, you can track what your project’s budget is being used for and determine whether the resources you’re paying for are worth the price. From there, you can fine-tune, adjust, and optimize your project’s budget by increasing investment in some areas and eliminating unnecessary expenses in others.
Companies can use cost codes to determine whether it’s financially viable to subcontract a portion of their projects and hire professionals better equipped to complete specialized tasks.
What does a construction cost codes list usually include?
Firms typically use construction cost codes lists sourced from the Construction Specifications Institute (CSI), an association of experts dedicated to improving communication across construction projects.
With the growing complexity of construction projects and the wider range of labor and materials involved, the CSI would recognize a need for construction coding specifications to ensure that all parties and stakeholders understand relevant costs.
To this day, many companies reference the CSI’s MasterFormat manual, but it’s also not uncommon for construction firms to have their own list of cost codes, especially for projects with more unique requirements. These cost code lists are usually company-specific rather than differing from project to project.
Regardless, here’s what you’ll typically find in construction cost codes lists. There are gaps between some divisions since the CSI continuously expands the list.
- Division 00: Procurement and contracting requirements
- Division 01: General requirements
- Division 02: Existing conditions for site construction
- Division 03: Concrete
- Division 04: Masonry
- Division 05: Metals
- Division 06: Woods, plastics, and composites
- Division 07: Thermal and moisture protection
- Division 08: Openings (doors and windows)
- Division 09: Finishes
- Division 10: Specialties
- Division 11: Equipment
- Division 12: Furnishings
- Division 13: Special construction
- Division 14: Conveying systems and equipment
- Division 21: Fire suppression
- Division 22: Plumbing
- Division 23: Heating, ventilating, and air conditioning (HVAC)
- Division 25: Integrated automation
- Division 26: Electrical
- Division 27: Communications
- Division 28: Electronic safety and security
- Division 31: Earthwork
- Division 32: Exterior improvements
- Division 33: Utilities
- Division 34: Transportation
- Division 35: Waterways and marine construction
- Division 40: Process integration
- Division 41: Material processing and equipment-handling
- Division 42: Process heating, cooling, and drying equipment
- Division 43: Process gas and liquid handling, purification, and storage equipment
- Division 44: Pollution and waste control equipment
- Division 45: Industry-specific manufacturing equipment
- Division 46: Water and wastewater management
- Division 48: Electrical power generation
How many construction cost codes does a company need?
Although there is a standard list of construction cost codes, including all of them for every project is unnecessary. In fact, a common mistake that companies make is incorporating too many cost codes into their projects, which adds no value, creates more work for accounting, and makes reconciling costs more of a headache than it needs to be.
A good rule of thumb is to include the most essential cost codes. Consider, also, who is meant to benefit the most from referencing these codes. Different stakeholders will require different levels of information, so it’s important to provide just enough detail for informed decision-making.
Of course, for projects that require more specificity, technology can go a long way in helping you manage cost codes.
Manage cost codes for construction projects with SmartBarrel
Although cost codes for construction projects are incredibly useful, memorizing multiple strings of numbers isn’t exactly ideal, especially when working in fast-paced environments.
The SmartBarrel device helps contractors instantly access cost codes from anywhere, ensuring that the right codes are assigned. Our solution automates tasks to save admin time so you can focus on what’s important.
You can easily split cost codes across multiple shifts and accurately track construction phases, tagging shifts with as many variables as you want. Monitor floors and wages to be paid, all at your fingertips.
Worried about dealing with too many new technologies on the job site? No problem! The SmartBarrel device is intuitive and easy-to-use, and conveniently integrates with Procore and other ERP software so you can upload, track, and manage cost codes at the touch of a button.
SmartBarrel makes management easy—request a demo today!
