Cost codes: How are you managing your spend?

Eric Helitzer

June 10, 2024

Procurement Practices

Cost codes are more than a purchasing tracking tool. They are the foundation of accurate budgeting and forecasting. Every dollar spent on materials gets coded into a budget, sometimes broken down further into phase codes by level, then into cost types for materials, equipment, and tools.

The problem is the tracking. Assigning cost codes manually, across every line item on every PO, is slow. Most subcontractors don't have time to do it properly at the point of purchase. So it doesn't happen until the invoice comes in. By then, you're not managing spend. You're reconstructing it.

How subbase handles it

Point of purchase cost code assignment. When a purchase order is raised in SubBase, cost codes are assigned right there, at the moment of purchase. Not at invoice day. Not when accounting is trying to close the month. When the order goes out. For frequently ordered items, the process is automated entirely, the cost code pre-fills and the order moves without anyone touching it.

Automated invoice reconciliation. Because the cost code is already assigned at the PO level, reconciling the invoice against it is automatic. Accounting isn't manually matching paperwork or chasing down what code applies to which line item. The work is already done.

Reporting down to the line item. You can run reports by PO, line item, project, or vendor. Every material order is visible, at cost, by project, by cost code. If something was ordered and not delivered, it shows up. If a line item is running over, you see it before the invoice lands, not after.

Approvals that enforce accuracy. Nothing gets approved in SubBase unless the cost codes are correctly assigned. That one constraint eliminates the back-and-forth between accounting and project managers that happens when codes are missing or wrong. It also means the data flowing into your accounting system is clean from the start.

Integration with your existing systems. SubBase connects to your accounting system and maps to your existing cost code structure, whether you run hyper-specific codes by project phase and building or keep it simpler. The platform adapts to how your company already works.

‍

‍

Why auto-population matters

The biggest time saving is on the items you order constantly. Small tools, formwork accessories, consumables, anything that goes on the same cost code every single time. Manually entering that information on every order is one of those tasks that feels minor until you add it up across a year.

SubBase pre-fills cost codes for frequently ordered items. The code is there before anyone has to type it. For a purchasing team processing hundreds of POs a month, that's not a small thing.

‍

‍

The bottom line

If your cost codes are getting assigned at invoice time, you don't have a real-time budget. You have a rearview mirror.

The only way to maintain accurate forecasting across multiple active projects is to capture cost code data at the point of purchase, automatically, every time. That's what SubBase does.

Book a demo to see it in action: https://www.subbase.io/subbase-demo

‍