A common problem for contractors is setting up item codes in their accounting software. Most accountants and bookkeepers fail to fully understand the concepts behind item codes and how it works with the construction industry. This article is designed to explain to you the underlying concepts and how to set up item codes for contractors.
Item codes are unique identifiers assigned to inventory or services rendered. It is comprised of both revenue and cost codes depending on the respective function. They are used with both financial and cost accounting.