What is the relationship between Cost Code and Cost Impact?

While "Cost Code" and "Cost Impact" are two terms often used within the construction industry, they refer to different concepts. Cost Codes are a standard set of numeric or alphanumeric values that represent common construction expenses, allowing companies to track, manage, report, and catalogue costs & spending throughout a project. For example, the Construction Specifications Institute's (CSI) Cost Code for Concrete Slab Foundations is "3-320". 

Cost Impact refers to the effect that a change, deviation, or event has on the overall project cost—or the difference between the expected and actual cost. For example, let's say you're building a commercial office building with an original plan to install a specific type of flooring material that costs $10 per square foot across 5,000 square feet of office space. However, during the construction process, your client expresses a desire to upgrade the flooring material to a higher-quality material that costs $15 per square foot in 2,000 square feet of the office space. The original cost of flooring for this project was going to be $50,000 ($10 x 5,000). But with the change request, the cost of flooring for the building will be impacted by $10,000 ($15-$10 x 2,000). So, the total flooring cost will now be $60,000 ($50,000 being the original budget and $10,000 being the Cost Impact). 

ConstructionOnline Users will find Cost Impact fields across the platform in places such as Punch Lists, Checklists, Change Orders, RFIs, Submittals, Transmittals, and some Daily Logs. 

Click here for more frequently asked questions (FAQs) regarding Cost Codes.