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 lifecycle.
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.
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||Labour, 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, analyse 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 customisable 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.
- Utilise Data Collected in the Field to Track Labour 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 Labour Costing and Set Up the Procore Labour 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.
Head Contracts Tool
After setting up the Budget tool, you can begin creating one or multiple head contracts for your project. With the Head Contracts tool, your team can replace stacks of paper and expensive printer costs with a central location for digital contract management.
- Set Up Your Head Contract. While most Procore customers create a single head contract for a single construction project, project teams do have the option to create multiple head contracts in the Head Contracts tool. For details, see Create Head Contacts. Similar to budget, you can also choose from two methods for setting up your head contract: (1) You can manually Update the Program of Values (SOV) on a Head Contract or (2) you can Import a Head Contract SOV from a CSV File. When finished with the initial setup, simply approve it. See Approve a Head Contract.
TipDoes your construction project have multiple funding sources or delivery methods? Learn why some Procore clients decide to create multiple head 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 head contracts?
- Create and Manage Owner Progress Claims. After your head contract is set and you've set up the Commitments tool as described below, you can also create and manage your owner progress claims. An owner progress claim 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 head contractor and submitted to a project owner to signal that a payment is due for completed work. See Create an Owner Progress Claim.
- Create a Payments Received Register. After you receive your payment, you can also create a register 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 Head Contracts tool, see Head Contracts.
After your contract(s) are approved and completed in the Head 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 variation 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 retention 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 head 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 Tender and Convert it into a Subcontract, or you can (2) directly Create a Subcontract in the Commitments tool.
- Create Subcontractor Progress Claims and Manage Progress Claim Contacts. Using the Commitments or Invoicing tool, you can also Create an Progress Claim on Behalf of an Progress Claim Contact or you can provide your subcontractor's progress claim contacts with the appropriate permissions to access their purchase orders and subcontracts. See Add Progress Claim Contacts to a Purchase Order or Subcontract. Users with 'Admin' permission on the Commitments tool can also use those permissions to manage progress claims with the Invoicing Tool.
- Create a Payments Issued Register. After you start issuing payments on your project, you can create a register 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 Variations and Change Events tools or, (2) Enable only the Variations tool.
Variations 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, variations can then be created based upon the submitted quote.
- Configure Your Variation Tier Settings. You can choose between a one (1)-, two (2)-, and three (3)-tier variation 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 variation tiers? Once you've decided, you can Configure the Number of Head Contract Variation Tiers and Configure the Number of Commitment Variation 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 variation. See Review RFQ Responses.
- Create Variations. 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.
Variations without Change Events
If your team decides not to enable the Change Events tool, you can still use the Variations tool to account for additional costs. For most Procore customers, this change management workflow starts off by creating a Potential Variation (PV).
- Create a Potential Variation (PV). Use a potential variation to manage any additional costs affecting the head contract. When creating a PV, you can only enter a dollar amount. Later, when you update the Schedule of Values (SOV) for the PV, you'll have the option to select a cost code. Ideally, the PV 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 Variation (PV)
- Create a Commitment Variation (CV). After the PV is created, you move on to create a CV. The CV acts as a request for pricing from the subcontractor who will be responsible for completing the scope of work that you outlined in the PV. You can compare the CV to the corresponding PV and view your variance between the two. To learn more, see Create a CV From a PV.
- Create a Variation Request (VR). After you've created PCOs, you can package one or multiple PCOs into Variation Requests (VR). 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 Variation Request (VR).
- Create a Head Contract Variation (HCV). Next, you can begin creating variations. Note that when you set a variation's status set to Pending, it appears in the 'Pending Budget Changes' column of the Budget tool. After the HCV is set to Approved, the total dollar amount change is reflected in the 'Approved VARs' column of the Budget tool. Approved HCVs can be added to head contract progress claims. For details, see Create a Head Contract Variation (HCV).
- Create a Commitment Variation (CV). A commitment variation outlines variations in costs that affect the contract between the head contracting company and a vendor or subcontractor. Once you have marked the CV as approved, the dollar change will be reflected in the "Committed Costs" column on the Budget tool. Commitments and potential CVs with a status of "Pending" will show up in the "Pending Cost Changes" column on the Budget tool. See Create a Commitment Variation (CV).
To learn what else you can do with the Variations tool, see Variations
Procore's Invoicing tool uses the user permission granted in the Commitments and Head Contracts tool. As your project progresses and the contracts have been created and approved, subcontractors can bill you for completed work via subcontractor progress claims. You can also create owner progress claims, 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 progress claim'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 Progress Claims. With the Invoicing tool, you can keep user permissions restricted to your project team and Create an Progress Claim on Behalf of an Progress Claim Contact or you can provide your subcontractor's progress claim contacts with the appropriate permissions to access their purchase orders and subcontracts. See Add Progress Claim 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 Progress Claim Contact and your subcontractors can then Submit a New Progress Claim as an Progress Claim Contact. You can then review and approve these progress claims.
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:
- Progress Claims. Create a direct cost for a paper progress claim 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