Project coding can help you understand how your business is doing. It is a way to track a specific area of your business so you can see what your budget, revenue, expenses, and overall activity is for a particular item. You can use project coding to keep track of different jobs if you are an independent contractor. This will help you determine how much to charge when the project is done, because the charges for each job are kept separate from other jobs.
When you add up all items with project coding and all items without project coding, you get the total financial picture for your company. By using project coding, you can pull reports based on the project number at any time. This lets you know what’s going on exactly when you need to know. While the overall recording of financial information reports the activity of your entire business, project coding allows you to dig deeper into particular areas.
To code projects in financial systems, you must have a project module, create special codes for each project, and consistently use the codes as the need comes up. A project code can be a random number or a specific code that relates to the job. Either way, including this code on all of your accounting entries will let you keep this information separate from all other records and together with all records at the same time.