Designing Category Systems

NOTE-- We retired the MacNail estimating program in 2000, and replaced it with Goldenseal construction estimating software. There are still a significant number of die-hard MacNail users, so we keep the manuals online for them! Goldenseal is an integrated program that also includes accounting, scheduling and contract writing. Goldenseal also includes category systems that are very similar to the ones used in MacNail.

Estimating Cost Categories

If you are setting up a new cost category system, it's a good idea to analyze your needs before you create it. You'll be living with this system for a long time, and it might better be good from the start!

If you are using an existing category system that you've developed on your own, your new system should probably be as close to it as possible-- simply because you are already familiar with it. It doesn't really matter whether you've previously computerized your system or still use paper or an estimating book-- you'll still be able to fit the category system into a format similar to the one in the MacNail construction estimating software.

It's a very good idea for your cost categories to be roughly chronological, putting the first things that actually happen in your construction projects into the first categories, and the last things you do on the job in the last categories.

Having your cost categories in chronological order will make your MacNail schedules much easier to use, since they will start right out with everything in the proper sequence.

Cost categories should be as equal-sized as possible. If one of your cost categories always seems to have more than its share of costs, you might want to split it. If some cost categories are always very small, you might want to combine them with something else.

If you subcontract some or all of your work, you'll probably want to divide your cost categories so they are one to a sub. That way your estimates will show the actual subcontract amount, directly, and you won't need to subdivide invoices when job costing.

At Turtle Creek Construction we did find it worthwhile to split electrical and plumbing costs into 'rough' and 'finish' phases, and our MacNail category system reflects that split. You'll probably write separate checks for rough-in and finish anyhow, and splitting that work helps keep schedules in the MacNail construction management software in more accurate chronological order.

Finally, your cost category system should be as well-planned as possible! Since it does affect many aspects of your business, it's worth taking some time to think about the cost category system, and map out something that is well-suited to your needs.

See also page 25 for more about category system design.