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The Cost and Profit centers (hereunder being indicated as Cost centers) allow the user to catalog the transactions according to different criteria than the usual accounts.
Cost centers are usually used to catalogue expenses to specific activities, which may or may not have a correlation between them.
- Projects, Events, Shipyards
- Customers and suppliers, Partners, Sellers
- Additional detail for certain expenses (e.g. ancillary expenses)
The cost centers are attributed to the transaction row.
Segments, on the other hand, follow the debit and credit account, and are used as a systematic subdivision of all income and expenses.
Cost centers and segments can be used simultaneously.
Characteristics of Cost centers
- The Cost and Profit centers (CC) are accounts, preceded by the ".", "," and ";" signs
- There are three cost center levels:
- CC1 preceded by a period "."
- CC2 preceded by a comma ","
- CC3 preceded by a semicolon ";"
- Each level is independent of the other
- For each level, there can be an unlimited number of cost centers.
- A superior level can be used without using an inferior
- Cost center codes can be alphabetic or numeric
- Cost centers can have there own grouping, different than those of normal accounts. For the same level of cost centers, subgroups can be created. Be careful to not mix cost centers groups with other groups of a different level or with normal accounts or segments.
- Each cost and profit center has its own account card, complete with transactions and balance
- Recording on the cost center is independent of the account recorded in debit or credit. One can even record on a cost center without any account in the debit and credit column.
Setting up cost centers in the Accounts table
- Create a specific section for the cost centers.
This setup will be necessary for the presentation of the cost centers in the Enhanced Balance Sheet by groups.
- Enter a section with an asterisk * for a section change
- In the next row, enter 03 (or 04 for a profit center).
- Add some empty rows for the cost center
- In the Group column, enter the group to which the cost center account belongs
- In the Account column, enter the cost center account preceded by a full stop "." for those to be registered in CC1 column (Transactions table), a comma "," for those to be registered in CC2 column and a semicolon ";" for the ones to be registered in the CC3 column.
- In the Gr column, indicate the group in which the amounts have to be totalized.
- In a Multi-currency accounting, the account currency is also specified.
- Add the cost center groups
- In one and the same group, totalize only one specific level.
- As for normal accounts, different levels can be created.
File 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 inclusing the VAT.
In order to register on the cost centers, it is assumed that the cost center accounts have already been entered into the Chart os accounts.
To proceed with the recordings, you need to be in the Transactions table, in the Cost centers view; in the CC1, CC2, CC3 columns, you need to enter the cost center account without the punctuation that precedes it.
- To record on the cost center in credit, the cost center needs to be entered preceded by the minus sign (-).
- For the Income & Expense accounting, in the File and accounting properties, you can define for the cost centers to follow the sign of the category.
- In order to record a global amount on more than one cost center of the same level, a different row needs to be created for each different cost center.
If you wish to display the Cost Center description in the Transactions table, you need to activate the corresponding column (CC1Des., CC2Des. or CC3Des.) with the Columns setup command from the Data menu.
Cost center account card
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 Account1, and then on the Cost centers button (Filter option).