Cost codes
Cost codes are standardized buckets (e.g. materials, labor, subs, equipment — often by phase) used to categorize every job cost so you can compare actuals to the estimate.
Cost codes are what make job costing meaningful: every transaction is tagged to a code, so you can see exactly where a job ran over. QuickBooks doesn't have construction cost codes natively, which is why generic accounting tools struggle with real job costing.
See also: Why QuickBooks falls short for job costing
Related terms
- Job costing — Job costing is tracking the actual costs of a specific job — materials, labor, subs, and other expenses — against what you estimated, so you know the real profit on that job.
- Estimate vs. actual — Estimate vs. actual compares what you bid for each part of a job to what it actually cost, revealing where your estimating was off.
- Committed cost — A committed cost is money you're obligated to spend but haven't been billed for yet — typically an open purchase order or signed subcontract.