Cost centers are the operational buckets you use to slice your financials by department, branch, project, product line, or any other dimension that matters to how you run the business. Once an account answers "what kind of money is this," the cost center answers "which part of the company is responsible for it."
Cost centers are optional on most documents, but when you use them consistently they unlock the Cost Center Report and let you ask questions that the Chart of Accounts alone cannot answer, such as "how much did the warehouse team spend this quarter" or "which branch generated the most revenue last year."
Go to Master Data > Accounting > Cost Centers.
Cost centers are hierarchical. A parent cost center can have any number of children, and totals roll up from the leaves to the parents in the Cost Center Report.
A typical Setup looks like this:
You can nest as deeply as you need. Most companies stay within two or three levels.
| Column | Description |
|---|---|
| Code | Short identifier used on transactions and Reports. Keep it stable, it should not change over time. |
| Name | The human-readable label that appears in dropdowns and on the report. |
| Parent | The cost center this one rolls up into. Leave empty for top-level cost centers. |
| Active | Inactive cost centers stay in history but no longer appear in dropdowns when creating new documents. |
| Description | Optional notes about what this cost center covers. |
You can tag a cost center on:
The Cost Center field is optional. A line without a cost center is still posted to the GL, it just will not appear under any specific cost center in the Cost Center Report.
Related: Cost Center Report - Chart of Accounts - Account Categories - Expenses - Invoices - Journal Entries
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