Cost Codes & Schedule of Values
Cost codes and the Schedule of Values (SOV) are the foundation of Appello's job costing system. Cost codes define what categories of work are being performed (e.g., pipe insulation, duct wrap, cladding), while the SOV defines the contract value for each line item. Together, they enable real-time tracking of earned value vs. actual cost on every job.
Understanding Cost Codes
What Are Cost Codes?
Cost codes are standardized categories that classify the type of work being performed. When a worker's timesheet is approved, the hours and associated labour cost are allocated to a cost code — enabling per-activity cost tracking.
Typical Cost Code Structure
An insulation contractor's cost codes follow a hierarchical pattern:
| Code | Description | Category |
|---|---|---|
| 01-100 | Pipe Insulation — Hot | Mechanical Insulation |
| 01-200 | Pipe Insulation — Cold | Mechanical Insulation |
| 01-300 | Equipment / Vessel Insulation | Mechanical Insulation |
| 01-400 | Duct Wrap / Duct Board | Mechanical Insulation |
| 02-100 | Metal Jacketing — Pipe | Sheet Metal / Cladding |
| 02-200 | Metal Jacketing — Flat | Sheet Metal / Cladding |
| 02-300 | Architectural Cladding | Sheet Metal / Cladding |
| 03-100 | Firestopping | Fireproofing |
| 03-200 | Passive Fire Protection | Fireproofing |
| 04-100 | Scaffold Erection | Scaffolding |
| 04-200 | Scaffold Dismantle | Scaffolding |
| 05-100 | Removable Covers — Fabrication | Removable Covers |
| 05-200 | Removable Covers — Installation | Removable Covers |
| 90-100 | Supervision | Overhead |
| 90-200 | Safety | Overhead |
| 90-300 | Site Mobilization | Overhead |
Managing Cost Codes
Cost codes are configured at the job level:
- Open a job's detail page.
- Navigate to the Cost Codes tab.
- Add cost codes that apply to this job.
- Set budget amounts per cost code (from the estimate or contract).
Schedule of Values (SOV)
What Is an SOV?
The Schedule of Values breaks down a contract into billing line items — each with a dollar value. It's the basis for progress billing: as work is completed on each line item, you bill the customer for that percentage of the line item's value.
SOV Structure
| Line | Description | Contract Value | Previously Billed | Current % | Current Billing |
|---|---|---|---|---|---|
| 1 | Pipe Insulation — Hot | $125,000.00 | $50,000.00 | 15% | $18,750.00 |
| 2 | Pipe Insulation — Cold | $45,000.00 | $20,000.00 | 10% | $4,500.00 |
| 3 | Equipment Insulation | $80,000.00 | $0.00 | 5% | $4,000.00 |
| 4 | Metal Jacketing | $60,000.00 | $30,000.00 | 20% | $12,000.00 |
| 5 | Firestopping | $35,000.00 | $0.00 | 0% | $0.00 |
| Total | $345,000.00 | $100,000.00 | $39,250.00 |
SOV Templates
Reusable templates speed up SOV creation for similar jobs:
- Navigate to Settings → SOV Templates.
- Create a template with standard line items.
- When creating a new job SOV, select a template as the starting point.
- Adjust line item values to match the specific contract.
Earned vs. Burned
The Core Question
For every job, contractors need to answer: "Am I making money or losing money on this work?"
| Metric | Definition | Source |
|---|---|---|
| Earned Value | What the work is worth per the contract | SOV % complete × line item value |
| Actual Cost | What the work actually cost in labour, materials, etc. | Timesheets + material costs + expenses |
| Variance | Earned minus Actual — positive = profitable | Calculated |
Example
| Cost Code | Earned (from SOV) | Actual (from timesheets) | Variance |
|---|---|---|---|
| Pipe Insulation — Hot | $68,750.00 | $55,000.00 | +$13,750.00 ✅ |
| Metal Jacketing | $42,000.00 | $48,000.00 | -$6,000.00 ❌ |
| Firestopping | $0.00 | $2,500.00 | -$2,500.00 ❌ |
This tells the PM that pipe insulation is ahead of budget, but metal jacketing is over — requiring investigation.
How Cost Codes & SOV Connect to Other Features
| Feature | Integration |
|---|---|
| Timesheets | Workers select a cost code when entering time — labour costs allocate to the right category |
| Bulk Timesheet Entry | Foremen assign cost codes per crew member per shift |
| Progress Reports | SOV drives progress billing calculations |
| Invoicing | Invoices pull from SOV progress for line-item billing |
| Job Financial Summary | Rolled-up earned vs. burned at the job level |
| Employment Agreements | Burdened labour rates used for actual cost calculation |
Related Pages
- Progress Reports — Progress billing from SOV
- Accounts Receivable & Billing — Invoice management
- SOV Templates — Reusable Schedule of Values templates
- Timesheet Matrix — Where cost codes are captured
- Employment Agreements — Burdened rates for cost calculation