Cost and Profit Centers

The cost and profit centers are groupings that allow you to have details outside of the accounting for reporting purposes, within the firm. Particularly they are very useful to manage:

  • Projects
  • Events
  • Building sites
  • Clients and suppliers
  • Members
  • Extra details for certain expenses

Characteristics

  • Each cost and profit center has its own account card, complete with movements and balance
  • Unlimited number of cost centers can be created 
  • Up to three types of cost centers can be managed, and each cost center may have different subgroups.

Maximum three types of cost centers

Maximum three types of cost centers can be indicated; they need to be set up with the following punctuation preceding the account number:  full stop, comma and semicolon.

Cost center CC1 (with a full stop) can, for example, be used to enter all the transactions pertaining to a certain project, CC2 (comma) for a department, and CC3 (semicolon) to keep track of the transactions of a client or supplier.

    CC1 column in the Transactions table,  account number preceded by a full stop
    CC2 column in the Transactions table,  account number preceded by a comma
    CC3 column in the Transactions table,  account number preceded by a semicolon
 

Configuration of cost centers

The three types of cost centers must be entered before the account with the following punctuation: full stop ".", comma "," and semicolon ";".

To set up the cost centers proceed as follows:

  • In the column Section, enter an * for the change of section and in the following row insert 03 (or 04 for a profit center). These settings will be required for the presentation of cost centers in the Enhanced balance sheet with groups
  • Insert blank rows for the number of cost centers to be included
  • In the column Group column, enter the group of origin
  • In the column, enter the accounts cost centers in the column account, preceded by a full stop "." for those to be registered in column CC1 (table Transactions), a comma ",", for those to be registered in column CC2 and the semicolon ";" for the ones to be registered in the column CC3.

Properties (VAT amount)

In the File and accounting properties command, in the VAT tab you can set the amount of cost centers with the following options:

  • Use transaction amount - The amount of the cost center is registered according the registration amount
  • Use amount excluding VAT - The amount of the cost center is registered net of VAT.
  • Use amount including VAT - The amount of the cost center is registered gross of VAT.

 

Registrations

In order to register on cost centers, it is assumed, that cost centers have already been entered in the accounts plan.

To proceed with the registrations, you need to be in the table Transactions, in the Cost centers view; in the CC1, CC2, CC3 columns, you need to enter the cost center the account without the punctuation that precedes it.


 

Account card of cost center

The cost center is treated as any other account, so each cost center has its own account card with account balance and account transactions.

In order to view all cost center account cards, click on the command Account/Category cards in the menu Account1, Simple1, and then on the button Cost centers.

 

Negative entry

For Simple Accounting and Cash Book, the cost center entry follows the transaction amount. A negative entry is made in the case of expenses.
In double-entry accounting (and optionally for Simple Accounting and Cash Book) the cost center code is entered, preceded by a minus sign (credit) (-CC1, -CC2, -CC3).
 

      Different groups in one cost center

      In order to manage different groups, belonging to the same type, in one cost center, you must enter the different groupings (with comma, full stop or semicolon) in the selected cost. The following example the groupings have been entered in the cost center CC3 (with semicolon):

      In order to allocate the cost center to a specific group in the table Transactions, you must enter the account specific cost center. In our example, being a cost center set with a semicolon, the cost center must be entered in Column CC3, view cost centers.

      In the balance of the cost centers amounts, totals and grand totals for the group are automatically reported.

       

      Related documents:

       

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