Effective Job Numbering And Cost Code Systems

Overview

Many companies have a sequential job numbering system, but have you considered the possibility of altering the numbering sequence so you can pull reports for a certain type of project or projects by year and the informational reports that could be generated?

And, are your cost codes sufficient to cover the details you need to see in your reports? Do you lump all site related travel and subsistence into one code, or do you have the details of hotels vs. Housing and meals vs. Subsistence?

Not all software programs are sophisticated enough to allow for customized job type numbering sequences; However, even the basic job cost software systems can be adapted to allow for an advanced numbering system.

Specific Job Numbering Sequences

Advanced reporting techniques can yield a wealth of information. How jobs are numbered so ease the reporting burden so projects of a certain type and / or year can be easily excluded from the software. Samples of numbering sequences could be based on the following criteria:

· Year project was awarded

· Public vs. Private works

· Commercial vs. Residential

· Construction vs. Service

· Division (s) of the Company

If your software allows, you may start the job number with the year awarded, followed by the job type and then a sequential number. Management may request a report for gross revenue on all the commercial contractor improvement projects in 2013. If you have a numbering sequence, this would be an easy report to pull, rather than go through all your 2013 projects and manually add the numbers to obtain the Results.

The job cost master file is another good source of information if all fields are completed and there is a common usage of custom fields that can be used to pull reports.

Cost Codes – Too few or Too Many?

Often we see cost code lists that spill onto multiple pages. Most job cost software programs allow for use of one cost code for multiple categories (Labor, Materials, Direct Job Expense, etc.).

A good source to use for establishing a cost code list is the bid recap and detail sheets used when bidding projects. This will yield the different stages of labor, types of materials to install associated with that labor, the different types of equipment to be rented, categories of subcontractors and the details of direct job costs to be incurred.

These activities can be "numbered" to establish a list of cost codes. If the software allows for use of one code across multiple categories, give thought to not duplicating descriptions, but arranging codes together by "type" of work being performed, rented equipment, direct job expenses, work typically contracted out, etc.

Keeping your cost codes consistent will then allow even more sophisticated reporting – management can now ask for all commercial contractor improvement projects in 2013 and the total cost of crane rentals for the year on those specific projects.

Why Go Through These Steps?

History is a great source of information when anticipating the future. Cost details can be analyzed for specific types of jobs when preparing to bid a similar project. Historical information can be analyzed for margins on certain types of projects or a division of the company to make decisions on whether or not a certain type of work is profitable.

If fields are available in the job cost master file, reports can be declined not only by type and year but by project manager as well to look at performance and estimate vs. Actual results.

Conclusion

When developing any numbering system, consistency is important in order to maximize the reporting results. Management should determine the information they wish to see and develop job numbers and cost codes that will allow for advanced reporting not only to themselves but provide useful information to estimating, project managers and accounting as well.

Filed under: general. Bookmark the permalink.