October 28, 2022
In any industry, tracking costs contributes a critical factor to bottom-line accounting. Capturing costs in the construction vertical becomes essential due to the countless phases and changes a project can undergo; they directly affect a project's profitability.
The General Ledger (GL) provides a high-level description of the expenses on a project, while cost codes track specific costs associated with a project or job. Using the GL and cost codes together shows how much projects cost; this information becomes vital when making informed decisions concerning the project’s outcome.
The General Ledger reports on a construction project's progress and financial health. The GL, fundamentally a financial statement, includes all project expenses rolled up from cost codes.
The broad categories used in the GL can help construction companies track the project progress at a high level and quickly identify potential problems.
In addition to labor and material costs, construction projects can incur charges like insurance, permits, and equipment rentals. Typically, each cost category has its own set of cost codes; this makes it easier to track the various expenses associated with a construction project. Cost codes also act as a means for comparing actuals to budgets and forecasts.
Every construction company needs a standardized cost code software solution. With hh2 Document Flow, you can use standardized cost codes pulled from the accounting system or create customized codes.
Ultimately, you want to code your construction financials according to your business needs. With hh2 Document Flow you can code receipts, invoices, reimbursements, and payment apps anywhere, on any device. You can post the expense right in the app and choose a general ledger expense account associated with the cost code.