Cost Codes - An Overview

The Cost Code module serves as your master library for all cost items—including tasks, activities, deliverables, and quantity-specific tasks. These items are categorized by division and tied to specific cost codes, which form the building blocks for your project's financial documents, such as contracts, budgets, and estimates.

To help you build your master list, Linarc allows you to seamlessly select and import standard divisions and items from the Construction Specifications Institute (CSI) MasterFormat. You also have the flexibility to add custom items and codes tailored to your company's specific accounting practices.

This includes creating explicit codes for specialized scenarios, such as:

• Quantity-Specific Tasks: A single activity defined by a set quantity (e.g., creating separate codes for pouring 2,500 sq. ft. vs. 3,500 sq. ft. of concrete).
• Time & Material (T&M): Tracking variable labor and material costs.
• Recurring Costs: Standardized items that appear regularly across your projects.

Cost codes act as the connective tissue across the Linarc platform, ensuring accurate tracking and reporting in every module that deals with project financials.

Budgets: General contractors use cost codes to create the original project budget and track ongoing expenses. The budget includes contract-based cost allocations for the various divisions of work covered in the scope. Because cost tracking is a critical function for project managers, each line item in the budget is explicitly tied to a specific work item, task, or deliverable, complete with its cost code and assigned subcontractor.

Estimates: Contractors build their project budgets based on their commitment contracts. These estimates contain a comprehensive list of tasks, subtasks, and activities required to complete the assigned scope. General contractors performing their own work can also create estimates for self-performed tasks. 

Contractors can allocate funds directly from the budget or estimate lines to associates work items in their schedule. This ensures the scheduled tasks automatically inherit their respective cost codes. This direct link makes it easy to forecast and track expenses as work progresses, streamlining complex calculations—like planned Schedule of Values (SOV) and progress-based billing—by keeping everything accurately grouped by cost code.    

Change Orders: When project scopes change, cost codes ensure that every addition or deduction is accurately tracked. By assigning cost codes to Change Order line items, project managers can instantly see how scope modifications impact the overall budget and specific work divisions.

Cost Loaded Schedules: By tying cost codes directly to schedule activities, you can visualize exactly when and where money is being spent over the course of the project. This is essential for accurate cash flow forecasting and progress tracking.

Schedule of Values (SOV): Cost codes form the backbone of your SOV. By mapping your codes to specific SOV line items, you create a standardized, transparent breakdown of the contract amount, making the payment application process smoother for both contractors and owners.

Time & Material (T&M) Tickets: Dedicated cost codes for T&M work aid in effectively managing projects with variable scopes or evolving requirements. Assigning specific cost codes to T&M work makes it significantly easier to capture unforeseen costs. This streamlines the tracking of labor hours, materials, and equipment usage for each task, ensuring that every entry remains traceable and accurate for billing.

Recurring Cost Items: Cost codes make it easy to manage and forecast standard, repeat expenses across the lifecycle of a project—such as monthly equipment rentals, site security, or temporary facilities.

See the following pages for more information:

• The cost code interface
• Add task items and custom tasks