Cost Codes: How are you managing your spend on materials in real-time?
Eric Helitzer
,
June 10, 2024
Cost codes are more than just a purchasing tracking tool; they are a vital component of effective budgeting and forecasting. Every purchase is tracked within a budget via a specific cost code, with these codes sometimes being broken down into phase codes by level and then further into cost types for materials, equipment, and tools. The challenge lies in tracking spend in real time due to the manual process of assigning these cost codes and reconciling each purchase.
Cost codes are more than just a purchasing tracking tool; they are a vital component of effective budgeting and forecasting.
Every purchase is tracked within a budget via a specific cost code, with these codes sometimes being broken down into phase codes by level and then further into cost types for materials, equipment, and tools. The challenge lies in tracking spend in real time due to the manual process of assigning these cost codes and reconciling each purchase.
Subcontractors often don't have time to manually input cost codes for each request and order. This can lead to inaccuracies, making effective budget forecasting nearly impossible.
Real-time monitoring strategies through SubBase
The challenge is overcoming the lack of a systematic approach to cost code tracking and real-time budget management. SubBase addresses this by automating manual processes and centralizing the ability to track material spending.
SubBase addresses the challenges of cost code tracking with solutions designed to streamline the process:
Point of purchase cost code assignment: You can assign cost codes in real-time at the point of purchase. When processing the order through SubBase you can select the relevant cost code and the process can be automated for frequently ordered items.
Automated invoice processing: Within the manual process, it is almost impossible to track a cost code until the invoice comes through. SubBase allows the accounting staff to automatically reconcile the invoice with the purchase order raised in the system.
Reporting and analysis: You can run reports by purchase order, line item, project, or vendor. This allows you to track materials, monitor past orders and ensure that you are not paying for missing items. Detailed reporting down to the line item level lets you see which materials were ordered, at what cost, and for which project by cost code.
Streamlined approvals process: The approvals process is key for maintaining accurate cost coding. SubBase ensures that nothing gets approved unless the cost codes are correctly assigned. This eliminates unnecessary touchpoints, reducing the need for frequent back-and-forth communication between accounting and project managers.
Integration with existing systems: SubBase seamlessly integrates with your existing systems, whether you need hyper-specific cost codes for different projects or phases by building.
Automation and flexibility: SubBase automatically assigns cost codes for frequently ordered items, reducing the time required for manual entry.
These tools streamline the workflow process for accounting and project management teams, ensuring accuracy and reducing the back-and-forth communication between all stakeholders. This allows field teams to focus on their tasks without needing manual administrative tasks and clarification.
The importance of cost code auto-population
Auto-population is a game-changer for real-time spend tracking, as many items ordered on a daily basis are tied to the same cost codes. Automating this step saves significant time, and the centralized data system reduces the risk of error.
For example, small tools or formwork accessories that are purchased very frequently are often lumped into a single cost code. Manually entering this information, even for familiar items, can be time-consuming. SubBase eliminates this step, ensuring that cost codes are pre-filled and ready to go.
How do you keep up with cost code management?
Effective cost code management is essential for contractors looking to maintain real-time budgets and accurate forecasting. Reducing the complex manual process is the only way to ensure this can be accomplished.
The real-time management tools offered through SubBase simplify this complex process, through automation, accounting integration, and comprehensive reporting - ensuring that every dollar is accurately tracked with precision.
Are you ready to streamline your cost code management and improve your budgeting accuracy? Contact us today to learn more about how SubBase can revolutionize your cost code process.
