Table of Contents
Financial Management User Guide
For General Contractors
This user guide provides general contractors with information about how to use Procore's Project Financials tools to streamline your financial business processes across your project's lifecycles.
Some of the things you'll learn in this guide include:
Cost Codes Setup
The first step when setting up Procore's Project Financials tools in a Procore project is to verify that your cost codes were set up by the person who created your new project.
Procore default cost codes include a 16 Division cost code structure that aligns to the CSI MasterFormat® . See What are Procore's Default Cost Codes? However, some companies and projects may have requirements that lead you to create a unique cost code structure. When that is the case, you can import custom cost codes into either the Company level or Project level Admin tool. The import process can be used to add or edit cost codes but cannot be used to delete any existing cost codes.
Many companies design their cost code structure to align with the CSI MasterFormat. Other companies decide to implement a cost code structure that is unique to their industry, organization, or project environment. Regardless of the structure, you can submit a request to have a Procore representative import the custom cost codes for you or you can expedite the import process and perform your own cost codes import using the Procore Imports App.
Cost Code Structure
Procore customers create varied cost code structures to use for budget and cost accounting. The specific cost code structure that your company chooses to use in Procore will depend upon your company's specific accounting methods, practices, and requirements. For simplicity, most customers choose Procore's a two (2) level or three (3) level cost code structure. However, Procore's supports a structure of up to five (5) levels.
The table below shows some commonly used terminology that corresponds to Procore's supported cost code levels.
|Procore (2 Level Template)||Procore (3-5 Level Templates)||CSI MasterFormat||Project Accounting|
|Division||Cost Code Level 1||Division||Project|
|Cost Code||Cost Code Level 2||Subdivision||Subsidiary|
|Unused||Cost Code Level 3||Section||Work Breakdown Structure (WBS)|
|Unused||Cost Code Level 4||Subsection||Actual Work Activities|
|Unused||Cost Code Level 5||Subsection||Labor, Equipment, Material (LEM)|
Tutorials About Importing Cost Codes
There are several methods for importing cost codes into Procore. The method that you choose will depend upon:
- The number of levels in the cost code structure that your company chooses to create. Most Procore customers choose to import a two (2) level cost code structure. Some opt for cost code structures with three (3) levels. However, Procore supports a cost code structure up to five (5) levels. To learn more about the cost code import process and cost code structure in Procore, please review the articles below.
- Whether you want to import cost codes to the Company or Project level Admin tool. Importing your cost codes to the Company level Admin tool allows you to add the codes to any project that you create in Procore. Importing your cost codes to the Project level Admin tool allows you to add those codes to the selected project and use them only on that project.
- Whether you want to import cost codes yourself through the Procore Imports App. Importing your cost codes yourself through the Procore Imports App allows you to expedite the import process. The app is only available for a system running Microsoft Windows 7 or newer. See Install Procore Imports.
Use the links in the table below to gain access to the appropriate tutorial:
|Number of Cost Code Levels||Company Level Admin Tool||Project Level Admin Tool|
|Two (2) Levels
(Requested-import using the Procore Web application)
|Import Two-Level Cost Codes to the Company Admin Tool||Import Two-Level Cost Codes to the Project Admin Tool|
|Three (3) - Five (5) Levels
(Requested-import using the Procore Web application)
|Import Multi-Level Cost Codes to the Company Admin Tool||Import Multi-Level Cost Codes to the Project Admin Tool|
|One (1) - Five (5) Levels
(Self-import using the Procore Imports app)
|Import Cost Codes into the Company Admin Tool (Procore Imports)||Import Cost Codes into the Project Admin Tool (Procore Imports)|
Important Information For ERP Integrations
If your company has enabled the Company level ERP Integrations tool, it is recommended you use the steps below. In addition, keep in mind that the Procore Imports app does NOT support the import of cost codes to an integrated ERP system.
- Add QuickBooks Standard Cost Codes to a Project
- Add Sage 100 Standard Cost Codes to a Project
- Add Sage 300 CRE® Standard Cost Codes to a Project
- Integration by Procore: Add Viewpoint® Spectrum® Standard Cost Codes to a Procore Project
- Integration by Ryvit: Add Viewpoint® Vista™ Standard Cost Codes to a Project
Because each integrated ERP system uses unique terms for cost codes, the table below describes how third-party cost code terms correspond to each Procore Cost Code Level:
|Procore (3-5 Level Templates)||Sage 300 CRE® 1||Viewpoint® Spectrum® 2||QuickBooks® 3||Integration by Ryvit 4|
|Cost Code Level 1||Section 1||Phase Group (Major Group)||Item||Phase|
|Cost Code Level 2||Section 2||Phase Group (Minor Group)||Sub Item||Sub-phase|
|Cost Code Level 3||Section 3||Phase Code||Sub Item||Sub-sub-phase|
|Cost Code Level 4||Section 4 1||Unused||Sub Item 3||Unused 4|
|Cost Code Level 5||Unused||Unused||Sub Item 3||Unused|
2 The Procore + Viewpoint® Spectrum® integration can support more than three (3) levels. However, Procore will consolidate every character after three (3) levels into the third level. The recommended cost codes structure is three (3) levels.
4 The cost code structure for the Procore + Integration by Ryvit integration does NOT permit users to import cost codes into Procore and then export them to Integration by Ryvit. Instead, cost codes are a hard-coded two (2) level cost code structure and your cost codes must always be created in Integration by Ryvit. The Integration by Ryvit cost code structure does support up to four (4) levels. However, three (3) is the most common. See Configure Cost Code Preferences for Viewpoint Vista.
Procore's Budget tool helps your project team efficiently manage your project's budget. It is designed to help your team make informed financial decisions, track expenses against your budget in real-time, analyze historical snapshots, input detailed forecasts, and offers deeper visibility into the financial status of your project.
- Add Your Project's Budget Data. When getting started on a project, the first step is to Set up a Budget in a New Procore Project. You can choose from two methods: (1) Add a Budget Line Item directly to the budget tool or (2) Download and complete a budget template and complete the steps to Import a Budget.
- Configure Your Project's Budget Views. After adding your project's budget data, your Procore Administrator might want to explore our dynamic and customizable budget views. For details, see Set up a New Budget View. You can set up one, or multiple budget views, along with a wide variety of data columns, such as Original Budget Amount, Budget Modifications, Revised Budget, Pending Budget Changes, and more. You can also actively manage and monitor your project's budget using the 'Forecast to Complete' feature. For details, see Use the Forecast To Complete Feature.
- Identify and Track Trends with the Procore Forecasting View. Designed for owners (and contractors) who want to avoid cost overruns, your Procore Administrator can also request to enable the forecasting view in Procore. This lets you view how your construction project's cash flows over time by spreading the 'Project Cost to Complete' column value (or any column you define) across a time period. You can then perform line-by-line analysis to make informed adjustments to your budget allocation. To learn more, see Set Up a New Forecasting View.
- Utilize Data Collected in the Field to Track Labor Costs and Production Quantities. For customers that have purchased Procore's Resource Management and Field Productivity tools, your budget can be set to automatically Add a Budget View for Real-Time Labor Costing and Set Up the Procore Labor Productivity Cost Budget View.
- Reallocate Funds from One Line Item to Another Using Budget Modifications. After you've locked your original budget and set up the other tools listed in this guide, you can use the budget modifications feature to transfer money between cost codes. For example, if you have cost savings related to one cost code because it came in under budget, but expect another cost code to come in over budget, you can reallocate funds from the first cost code and add it to the latter cost code as a contingency. Budget modifications only appear on the Budget tool, so your vendors will not see your internal adjustments. For details, see Create a Budget Modification
To learn what else you can do with the Budget tool, see Budget.
Prime Contracts Tool
After setting up the Budget tool, you can begin creating one or multiple prime contracts for your project. With the Prime Contracts tool, your team can replace stacks of paper and expensive printer costs with a central location for digital contract management.
- Set Up Your Prime Contract. While most Procore customers create a single prime contract for a single construction project, project teams do have the option to create multiple prime contracts in the Prime Contracts tool. For details, see Create Prime Contacts. Similar to budget, you can also choose from two methods for setting up your prime contract: (1) You can manually Update the Schedule of Values (SOV) on a Prime Contract or (2) you can Import a Prime Contract SOV from a CSV File. When finished with the initial setup, simply approve it. See Approve a Prime Contract.
TipDoes your construction project have multiple funding sources or delivery methods? Learn why some Procore clients decide to create multiple prime contracts on their Procore project. This is helpful when you have a need to divide the scope of work on a project into multiple phases or stages, however, doing so does present a few considerations. For more information, see Are there any system limitations when projects have multiple prime contracts?
- Create and Manage Owner Invoices. After your prime contract is set and you've set up the Commitments tool as described below, you can also create and manage your owner invoices. An owner invoice is an itemized record of a financial transaction between a project owner and a company responsible for completing work. Typically, it is issued by a general contractor and submitted to a project owner to signal that a payment is due for completed work. See Create an Owner Invoice.
- Create a Payments Received Log. After you receive your payment, you can also create a log to track the payments you've received. Your budget and budget reports are automatically updated to reflect your entries. For details, see Create a Payment Received.
To learn what else you can do with the Prime Contracts tool, see Prime Contracts.
After your contract(s) are approved and completed in the Prime Contracts tool, you can begin setting up your project's financial commitments. In Procore, you can create two types of 'commitments': subcontracts and purchase orders.
- Set Up Your Contract Configuration, Dates, Distribution Lists, and Settings. Your company's Procore Administrator can work with you to define your project's default contract configuration. This is an important step before you start creating commitments on a project. You can choose the number of change order tiers for your commitments. You can also enable a variety of dates to use on your contracts by default. Settings also include default distribution list settings, your default accounting methods, setting a retainage percent (if applicable), and deciding to enable financial markup or payments by default. For details, see Configure Settings: Commitments.
- Create Your Project's Purchase Orders. In Procore, a Purchase Order (PO) is a documented financial commitment that details the types, quantities, and agreed-upon prices for products or services. As part of the procurement process, purchase orders are created by a 'buyer' (for example, a general contractor) and issued to a 'seller' (for example, a subcontractor) to cover the cost of a contract. Once accepted by the 'seller,' a purchase order represents an agreement between the two parties. See Create a Purchase Order.
- Create Your Project's Subcontracts. A subcontract is a contractual agreement between a general contracting company and the subcontractors who perform the scope of work. In Procore, there are two ways to create a subcontract: (1) You can Award a Winning Bid and Convert it into a Subcontract, or you can (2) directly Create a Subcontract in the Commitments tool.
- Create Subcontractor Invoices and Manage Invoice Contacts. Using the Commitments or Invoicing tool, you can also Create an Invoice on Behalf of an Invoice Contact or you can provide your subcontractor's invoice contacts with the appropriate permissions to access their purchase orders and subcontracts. See Add Invoice Contacts to a Purchase Order or Subcontract. Users with 'Admin' permission on the Commitments tool can also use those permissions to manage invoices with the Invoicing Tool.
- Create a Payments Issued Log. After you start issuing payments on your project, you can create a log to track the payments you've issued. Your budget and budget reports are automatically updated to reflect your entries. See Add Payments Issued.
To learn what else you can do with the Commitments tool, see Commitments.
Change Management Tools
Next, start learning about Procore's change management tools. There are two options for setting up these tools: (1) Enable the Change Orders and Change Events tools or, (2) Enable only the Change Orders tool.
Change Orders with Change Events
Change events are created for anything on a project that looks like it may create an additional cost. Creating a change event allows you to prepare for the cost of a change before it becomes an actual cost. After creating a change event, you can then create an RFQ (Request for Quote), which is sent to the appropriate subcontractors for pricing. When RFQs are created and responded to by the assigned subcontractors, change orders can then be created based upon the submitted quote.
- Configure Your Change Order Tier Settings. You can choose between a one (1)-, two (2)-, and three (3)-tier change order setting. Each tier adds a layer to your team's overall change management workflow. A lower number of tiers offers the most straightforward workflow. An increased number of tiers provides your team with a more complex workflow, but gives your team more control over changes. The most common settings among Procore users are to use the one (1) or two (2) tier setting. To learn more, see What are the different change order tiers? Once you've decided, you can Configure the Number of Prime Contract Change Order Tiers and Configure the Number of Commitment Change Order Tiers.
- Create Change Events. On a construction project, a change event is any change that affects the original scope of a construction project. There are numerous ways to create change events in Procore. In addition to using the Change Events tool (see Create a Change Event), you can also use any of the options available in the supported Procore tool or using Procore's mobile platform. For details on those options, see Which Procore tools can I use to create a change event?
- Create RFQs from Change Events and Review RFQ Responses. If you need to create an RFQ for your subcontractors to submit pricing, see Create RFQs from a Change Event. You can then review your subcontractor's quotes to determine if you want to move ahead with creating a change order. See Review RFQ Responses.
- Create Change Orders. You can create two types of changes orders in Procore:
To learn what else you can do with the Change Events tool, see Change Events.
Change Orders without Change Events
If your team decides not to enable the Change Events tool, you can still use the Change Orders tool to account for additional costs. For most Procore customers, this change management workflow starts off by creating a Potential Change Order (PCO).
- Create a Potential Change Order (PCO). Use a potential change order to manage any additional costs affecting the prime contract. When creating a PCO, you can only enter a dollar amount. Later, when you update the Schedule of Values (SOV) for the PCO, you'll have the option to select a cost code. Ideally, the PCO will affect a cost code already on the project's budget. This allows you to see the budget increase in the project's Budget tool. See Create a Potential Change Order (PCO)
- Create a Commitment Change Order (CCO). After the PCO is created, you move on to create a CCO. The CCO acts as a request for pricing from the subcontractor who will be responsible for completing the scope of work that you outlined in the PCO. You can compare the CCO to the corresponding PCO and view your variance between the two. To learn more, see Create a CCO From a PCO.
- Create a Change Order Request (COR). After you've created PCOs, you can package one or multiple PCOs into Change Order Requests (COR). CORs are typically the documents that are submitted for approval, and can be used for submitting either individual PCOs, or for grouping PCOs in order to streamline the review and approval process. See Create a Change Order Request (COR).
- Create a Prime Contract Change Order (PCCO). Next, you can begin creating change orders. Note that when you set a change order's status set to Pending, it appears in the 'Pending Budget Changes' column of the Budget tool. After the PCCO is set to Approved, the total dollar amount change is reflected in the 'Approved COs' column of the Budget tool. Approved PCCOs can be added to owner invoices. For details, see Create a Prime Contract Change Order (PCCO).
- Create a Commitment Change Order (CCO). A commitment change order outlines variations in costs that affect the contract between the general contracting company and a vendor or subcontractor. Once you have marked the CCO as approved, the dollar change will be reflected in the "Committed Costs" column on the Budget tool. Commitments and potential CCOs with a status of "Pending" will show up in the "Pending Cost Changes" column on the Budget tool. See Create a Commitment Change Order (CCO).
To learn what else you can do with the Change Orders tool, see Change Orders
Procore's Invoicing tool uses the user permission granted in the Commitments and Prime Contracts tool. As your project progresses and the contracts have been created and approved, subcontractors can bill you for completed work via subcontractor invoices. You can also create owner invoices, which can then be emailed to the owner or the party that is being requested for payment.
- Manage Billing Periods. In Procore, a billing period defines the billing cycle that is used for invoicing your project's subcontractors. In addition to defining the frequency of the billing period (for example, monthly or weekly), it also defines the billing period's start date, the invoice's due date, and the billing period's end date. To learn how to create a billing period with the Invoicing tool, see Create Manual Billing Periods and Create Automatic Billing Periods.
- Create and Manage Subcontractor Invoices. With the Invoicing tool, you can keep user permissions restricted to your project team and Create an Invoice on Behalf of an Invoice Contact or you can provide your subcontractor's invoice contacts with the appropriate permissions to access their purchase orders and subcontracts. See Add Invoice Contacts to a Purchase Order or Subcontract. Then, when you are ready for your subcontractors to bill you for their work, you can Send an 'Invite to Bill' to an Invoice Contact and your subcontractors can then Submit a New Invoice as an Invoice Contact. You can then review and approve these invoices.
To learn what else you can do with the Invoicing tool, see Invoicing
Direct Costs Tool
In Procore, the term direct cost is used to refer to a cost on a construction project that is NOT associated with a commitment. Using the Direct Costs tool, you can create these items:
- Invoices. Create a direct cost for a paper invoice from a non-contracted vendor for items such as printer ink, computer paper, or postage.
- Expenses. Create a direct cost for expenses that might include computer equipment, telephones, or internal equipment rentals.
- Payroll. Create a direct cost for monthly payroll costs classified by cost code, so that payroll amounts reflect each month on the budget.
To learn how to create a direct cost, see Create a Direct Cost.
To learn what else you can do with the Direct Costs tool, see Direct Costs