Cost Codes Overview

🧾 Cost Codes Overview

📘 Overview

Cost codes in Ontraccr are the foundation of your job costing workflow. They represent specific types of labor, material, equipment usage, or overhead work that your team performs and spends against on projects.

Each cost code acts as a trackable unit of cost, enabling detailed breakdowns in budgets, time tracking, invoices, and progress monitoring.

Think of cost codes as the DNA of your project financials — they determine how work gets tracked, how costs accumulate, and how profitability is measured.

🧱 What Are Cost Codes?

Cost codes define specific tasks, items, or categories of work that you want to track.

Examples:

• Electrical Contractor:
  • “Rough-In” (installing wiring into walls)
  • “Finishing” (installing fixtures and cover plates)
  • “Fire Alarm”
  • “Lighting Automation”
• General Use:
  • “Labor” (a simple catch-all code for general labor)

If you don’t break labor down into specific activities, using a single “Labor” code still allows meaningful tracking of time and costs.

🎯 Why Use Cost Codes?

Using cost codes gives you:

• A 1:1 link between budgeting and actual work performed
• Insight into where labor hours and dollars are going
• Clear comparisons between budgeted and actual values
• Granular reporting on labor, materials, overhead, and equipment

They're also required for time tracking, cost allocation, and job profitability analysis.

🧩 Cost Code Categories

Every cost code must be assigned to one of four categories, which affect how they behave across the platform:

Choosing the correct category is required and affects where the cost code can be used.

🗃️ Global vs Project-Specific Cost Codes

There are two main areas where cost codes are managed:

🔹 Global Cost Codes

• Acts as a company-wide library of all available cost codes.
• Not automatically used in every project.
• You choose which ones to apply per project.

🔹 Project-Specific Cost Codes

• Displays the list of cost codes currently in use on that project.
• Pulled from the global list or created fresh within the project.

This separation allows teams to keep their master list clean while tailoring code usage per job.

🔗 How Cost Codes Connect to Job Costing

Once cost codes are created and assigned to a project, they power many parts of your workflows:

• Budgeting: Assign hours and dollar values to each code during project setup.
• Time Tracking: Team members clock into specific codes.
• Cost Accumulation: Invoices, equipment logs, and hours are tied to codes.
• Profitability Analysis: Compare budget vs actuals at the code level.

All reporting and progress tracking flows from this foundational structure.

📌 Real-World Use Case

If you estimate $10,000 of labor for a job:

• Create a cost code called “Labor”
• Assign the $10,000 to that code in the project budget
• As workers clock in and out using that code, hours and costs accumulate
• The system compares actual costs against the $10,000 estimate in real time

This makes it easy to identify overruns, savings, and opportunities to adjust staffing or approach before the job is complete.

🧠 Tips & Best Practices

• Even for simple jobs, using a single “Labor” cost code is better than none.
• Always match your budget structure 1:1 with your cost codes for best reporting.
• Choose cost code categories carefully — they define what downstream features the code interacts with.