Involving the Right People in Planning
Leaving development of a cost code structure up to accountants or
executives alone is a mistake.
Estimators, project managers, field personnel and other employees can
provide important perspectives. They often have the best sense of the
everyday logistics of using and assigning codes and the most realistic
feel for what level of detail is practical.
Engaging hands-on, non-financial users in the development process also
enhances buy in. A new cost code system will change their daily work
requirements and it may mean additional work for them, at least in the
beginning. These employees will be more likely to use codes properly
if they had a role in developing them and understand why they are
important to their co-workers and the company as a whole.
Once a team is assembled to establish a cost code structure, using a
familiar tool like Excel or PowerPoint for the design phase can make it
easy to collaborate. The team should also try not to rush. Developing
initial ideas, stepping away and reviewing them, and then revising them
over time before finalizing the system is usually the best process.
COST CODE STAKEHOLDERS
AND PRIORITIES
Executives:
Analyzing production rates and
job progress vs. plan; assessing
profitability
Accounting and Payroll:
Job costing; tracking activities
and hours against budgets
Estimators:
Turning bids into budgets;
improving accuracy
Project Managers and
Field Personnel:
Capturing project information
appropriately; tracking activities
and hours against plan
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