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Cost Centre

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This function is used to define and maintain Cost Centres in your Organisation.  This includes static data, accounting data, Cost Centre rates, grouping of Cost Centres and Cost Centre relationships within the Organisation structure.

 

The Static Data tab is used to add new Cost Centres and maintain basic data relating to such Cost Centres. Direct types Cost Centre, add needs to be performed as follows.  Add the Cost Centre as an Indirect Cost Centre type first.  Define the applicable Cost Centre accounts via the account maintenance functionality on the Accounts screen.  Once this has been done, change the Cost Centre type to Direct, which will require the selection of production and project management  recovery accounts for labour and overhead costs.

 

The Accounts tab is used to define the recovery accounts for production and project management labour and overhead costs.  The accounts are only required for Direct type Cost Centres and are used when journals are posted to back flush labour and overhead costs and as such credit Cost Centres where linked work centres performed production or maintenance operations.  (Reversals of production or shipping movements will of course result in debit journals being posted to the same accounts).  The Production Recovery accounts are used when non-project related orders are completed, whereas, the Project Management Recovery accounts are applied when project managers approve project time sheets.

 

The Financial Cost tab is used to specify the applicable rates for labour and overhead costs which are defined per financial year for Direct type Cost Centres.  Journals that are posted against the Production Recovery accounts for labour and overhead costs, will usually apply these rates where linked work centres performed production or maintenance operations.  Work centres therefore inherit the Cost Centre rates as defined on this tab.

 

The Divisional settings, Allow Current Year Cost Centre Rates Updates and Allow Next Year Cost Centre Rates Update, govern whether Cost Centre rates may be changed.

 

The Cost Generation function also applies these rates when calculating labour and overhead costs via defined part operations.  The Project Management functionality uses these rates for project labour budgets entered against a given Cost Centre. However, an option is provided in the Project Management functionality that allows the alteration of these rates or to apply employee rates or labour resource rates rather than Cost Centre rates.

 

This tab is also used to specify the limits of authorisation for a Cost Centre.  These limits for capital and non-capital goods are applied when requisitions are released.  These job assignment limits will thus limit the release authority of a Cost Centre manager accordingly, (unless the Cost Centre manager was granted personal limits of authorisation that exceed the limits of the Cost Centre).

 

The Cost Centre Scenario tab is used to set a Cost Centre with rates as a scenario possibility. This can be used for forecasting for expenses and scenarios within budgets.  A code can be added and possible rates can be linked to the code for a specific period or date.

 

The Structure tab is used to display the organisation by showing the links between Cost Centres and Divisions in your organisation.  This function allows for both 'Top-Down' and 'Bottom-Up' inquiries.

 

The Grouping tab is used to link Cost Centres to groups and to define new groups to which Cost Centres can be linked.  The grouping can be done for reporting purposes or for visibility of a functional group to which a Cost Centre belongs (groups may be, Production, Engineering, Finances, Administration etc).

 

The Transfer History tab is used to transfer Cost Centres from one Division to another.  All the transactions made before the transfer against the Cost Centre will also be transferred.  Inter Divisional Clearance Accounts are journalised to reflect the expenses moved between the Divisions.

 

INQUIRE

The user must have a security profile linked to the function Cost Centre with an access allowed of Inquire.

 

On this tab the following fields can be viewed;

 

hmtoggle_plus1Code

It is populated with the Cost Centre code and Cost Centre description from the Cost Centre table.

 

The number of characters to be entered before the list is shown is governed by the value of populate length (mandatory).

 

It is used to uniquely identify a Cost Centre.  A Cost Centre is usually an organisation entity focusing on managing costs as compared to Divisions.

 

A Division (business unit) is usually the organisation entity for which financial statements are produced and the level where assets are managed (i.e. depreciation and ownership).

hmtoggle_plus1Description

It is a short descriptive name for the Cost Centre selected.

The length must be between 3 and 50 characters (mandatory).