A numbered category in the accounting system used to track costs for each type of work on a project.
A cost code is a numeric or alphanumeric identifier assigned to a specific category of work, material, or overhead expense in a contractor's job cost accounting system. Cost codes enable tracking of actual costs against estimated costs for each work item, providing visibility into project profitability and productivity. The CSI MasterFormat division structure is commonly used as the basis for cost coding.
Cost codes are the bridge between the estimate and job-cost accounting, so the way an estimator structures the bid buildup determines how cleanly actual labor, material, and sub costs can be tracked against budget during construction. Consistent coding, often aligned to CSI MasterFormat divisions, lets a contractor spot productivity slippage early, defend change order pricing, and build reliable historical unit costs for future bids.
When converting the winning estimate into the project budget, the estimator maps each line to cost codes so field labor hours charged to concrete placement can later be compared against the estimated unit cost per cubic yard.
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