Cost codes are unique identifiers assigned to items in an inventory sold individually or as a part of an assembly. The goal is to track the final outcome of the item(s) sold against the original estimated cost of the item. It is used in both financial and cost accounting.
The feedback loop is a concept used in business where information is processed and identified as beneficial or detrimental to the operation. Any negative feedback is corrected and the loop begins again. As time goes on, the goal is to perfect the business operation.
The goal of accounting is to make continuous improvements in operation by monitoring economic results over a period of time. Any changes to economic value is analyzed for impact and the source of the change. In effect, management is constantly tweaking the business to gain marginal improvements via financial results.
The number one tool for marketing is the handshake and a smile. It costs zero to extend the hand and use a few facial muscles. But the value it generates is priceless. Pretty much all business relationships begin this way. The handshake and smile is the most effective marketing tool available at all levels of business.
As a construction company owner, you need a profit and loss statement that conveys information in a format that will identify how much you are truly making as a profit. The best format is a construction profit and loss statement identifying contract revenues, direct costs, indirect costs and the overhead expenses. This format most closely matches the estimating style of most small construction companies.