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Using cost centre codes and department accounting

You can use cost centresA segment of an organisation for which costs are required to be collected and formally reported on separately; e.g. a company division such as sales or production. to segment parts of the organisation so that you can monitor individual areas in your company. They are used to collect the costs/revenues associated with the specified parts of the organisation.

Departments are subdivisions of a cost centre where costs/revenue are required to be collected and reported on separately. For example, a cost centre could be a sales area such as North East or South West, and different departments could be sections such as Administration or Training.

If you are consolidating Nominal Ledgers, we strongly recommend you set aside a cost centre for each subsidiary company, thereby segregating each company.

To produce a Profit and Loss for individual cost centres and departments you must:

Create the appropriate nominal accounts.
Apply the appropriate nominal codes when posting transactions.

To produce a Balance Sheet for individual cost centres and departments you must:

Select Split postings between cost centres for balance sheet accounts in Accounting System Manager Operational settings.

The appropriate Balance Sheet nominal codes are then applied to your transactions. The nominal accounts to be used for Balance Sheet postings are constructed using the organisation's default nominal codes together with cost centres and departments appropriate to the transactions.

If you do not select Split postings between cost centres for Balance Sheet accounts your default nominal codes are used for Balance Sheet postings.