What are cost codes?

Progress Billing is a method commonly used in the construction industry, where billing for a project is done at different stages as it progresses, rather than asking for full payment upfront or at the completion of the project. This type of billing is beneficial both for constructors and clients. For constructors, it helps maintain the cash flow required for the ongoing expense of materials and labor. For clients, it provides assurance that they are paying for the work only as it is being completed and allows them to budget effectively. Each invoice is usually based on the percentage of work completed, thus it is also known as percentage-of-completion billing method. Proper documentation, like progress reports or photos of the construction site, often accompany these invoices as a proof of progress.

Cost accounting in construction is a specialized financial practice that tracks, analyzes, and allocates every direct and indirect expense incurred on a jobsite back to a specific project or cost code.

Unlike general financial accounting—which tracks overall company revenue and balance sheets—construction cost accounting focuses entirely on project-level profitability. By monitoring actual costs against the original budgeted cost of work performed (BCWP) and original estimate, cost accounting enables trade contractors to catch budget overruns early, calculate accurate earned value, and maintain healthy profit margins across active jobs.

How Siteline Helps:
Cost accounting only yields real insights if billing keeps pace with jobsite expenses. Siteline bridges the gap between cost tracking and revenue by streamlining pay app creation, change order management, and real-time A/R reporting—ensuring the costs recorded in your job costing system turn into prompt, predictable cash flow.

Time-and-material billing is a method used in the construction industry where a client is charged based on the actual cost of labor and materials for a project, along with an added markup for the contractor's profit. This approach promotes transparency as customers directly pay for the time spent on the project and materials used. The advantage of this method is the flexibility it provides - if a project scope is unclear or likely to change, it can be more efficient than a fixed-price model. However, it also contains a risk for the client, with a chance that costs could increase if the construction takes longer or requires more resources than estimated. It requires meticulous tracking of working hours, materials, and equipment used. The client also needs to keep an eye on the project to avoid unnecessary costs.