cost codes in QuickBooks

How to Add Cost Codes in QuickBooks for Construction Bookkeeping

Do you know what cost codes in Quickbooks are? If you have a small business, you may still rely on basic to advanced spreadsheets for your accounting. But the moment you branch out, you will outgrow those spreadsheets faster than your business expands. In addition, they’re bulky, require a lot of maintenance, and are prone to formula errors, which can take hours to clean up.

Most businesses make the leap to accounting software, like QuickBooks. The earlier you start with QuickBooks, the better. Your learning curve will be shorter because of a lighter input load, and the cost codes in QuickBooks will make your life much easier.

What are Cost Codes in QuickBooks?

QuickBooks will save you a lot of time and money in the long run. One of the most important things to learn in QuickBooks is cost coding.

Cost codes in QuickBooks are how the system identifies things like materials, labor, subcontractor charges, fuel, taxes, etc. This makes for powerful accounting and reporting capabilities, where you can see at a glance what’s happening with your finances and where to adjust.

Adding the Codes

First, determine how you want to separate your items. For example, you will require codes for services and materials. Next, you will need to sit down and look at your current accounting system and think about how you can expand on it, or you may need to start from scratch and brainstorm all the items you can think of.

It is important to remember items and accounts are not the same things. You want to keep your accounts on the small side but have all the cost codes in the system to generate the accounting reports you need.

Adding the cost codes in QuickBooks is straightforward. Open the software and click Lists—Item Lists. Once there, choose Type—Service, Inventory or Non-inventory. Link it to an account from the list and enter the price.

You Do Not Have to Go it Alone

If entering those cost codes in QuickBooks seems like an enormous task, it can be. Depending on the size and complexity of your business, you can end up with hundreds of cost codes. However, you may already have existing cost codes in your spreadsheet software, and you can import those into QuickBooks through a different process.

Working Numbers has extensive experience with construction accounting, and we already have the tools available to cost code your business items. We aren’t starting from scratch, so we can have your accounting up and running in no time and with exceptional accuracy.

Instead of getting bogged down in the office, let Working Numbers get you back out on the job site. We can get you through a single large project or provide high-quality ongoing bookkeeping services. Contact us today for your cost-coding or bookkeeping needs.

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