Cost Codes, a Job Costing Tool
Professional estimators and accountants break a job down into its components. There are preparation, licenses, site preparation, concrete forms, foundations to pour, floors to build, walls to frame, electrical wires to be strung, pipes to be plumbed, sheet rock to hang, roofs to build and shingle, etc. Each of these processes may include labor, materials, equipment, subcontractors, and other items. Every process is calculated in "units" and "dollars." Pouring the concrete will require 12 yards at $50 per yard. Finishing the concrete will take 4 hours at $25 per hour, etc. etc.
Keeping track of these details is a huge undertaking. The Construction Specifications Institute (CSI) set up a list that includes the foreseeable phases of every job. They created their own numbering system with descriptive names, similar to what accountants do with their Chart of Accounts. The CSI list is called "Cost Codes." The estimator uses the CSI Cost Codes (or a list the estimator has devised) to budget for each phase of the job. That list of cost codes and the estimated cost for each item become the accountant’s budget.