Cost Center
A tag on every income and expense posting that says which part of the business it belongs to, without a separate account.
In detail
A cost center is a tag carried on every income and expense GL row that says which branch, team or activity the amount belongs to, without multiplying the chart of accounts. One Office Rent account can hold rent for the head office and the Koteshwor store, and the Profit and Loss Statement filtered by cost center splits them. Cost centers form a tree, with a company-level root and children such as Main - YFF and Marketing - YFF. Every document line needs one, so the company default fills in when you forget, which is why a never-reviewed default quietly piles everything under Main. Budgets are set per cost center, and the Budget Variance Report compares spend against them.
How to record it in BRAccount
- 01Go to Accounts Setup > Cost Center and click New.
- 02Name it, pick the parent cost center and leave Is Group unticked.
- 03On an expense line of a Purchase Invoice or Journal Entry, set the Cost Center field to it.
- 04Submit. The GL row carries the cost center tag.
- 05Open Financial Reports > Profit and Loss Statement and filter by Cost Center to read that branch alone.
When to use it
Pick it on expense lines to split a Profit and Loss by branch or team.
Example from the demo books
Yatra For Fun uses Main - YFF and Marketing - YFF.