A cost code is a numeric code that uniquely identifies a project, sub-project, group element, element, sub-element or component within a cost estimate or cost plan.
Cost codes allow cost information to be sorted, summarised and transferred consistently. In an NRM 1 cost plan, for example, the code reflects the level of the cost breakdown structure, so that components roll up into sub-elements, elements and group elements. Contractors and clients also use cost codes in their accounting systems to record actual costs against budgets, which makes cost reporting, cost value reconciliation and benchmarking much easier.
- Codes should be applied consistently from the first estimate through to the final account.
- A common coding structure helps when combining data from several projects.
Related terms: cost codification framework, cost breakdown structure, work breakdown structure, cost control.
