General definition: A cost center is often a department within a company. The manager and employees of a cost center are responsible for its costs but are not responsible for revenues or investment decisions
From the application cost center is manageable which will be created from the center. This is basically all the expenses of a particular type of a center. for example (car maintenance) you created a type of center as car which will be falling under category of cost center.
How to create a particular type of cost center.
Accounts--> Center--> Center Add
A window will appear as shown in the below screenshot:
As you can see from the category you are selecting the cost center and created the type of center "car" for car maintenance cost center
After generating the new cost center it will be shown in the center list.
1) Assigning Accounting Head to the specific cost center:
Basically Cost center relates to all expenses account. There are two ways you can process. One is creating new expense accounts related to the cost center that you have created or you can tag to all the expense accounts in the application that will hit the accounting entry related to that cost center. This is basically done in the cost center to provide the report and analysis of that specific cost center. Screenshot is given below of assigning accounts under a specific cost center.
From the list you can select the center and click on assign account
After clicking the assign account a window will appear of assign accounts: Test, There you will select the number of accounts that will impact on the cost center to show the reports and analysis of that cost center
2) What if you dont assign account?
You can still do it manually by the tagging process
Basically all the expense vouchers impact will fall on the cost center category
3) How does the expense voucher function puts impact on a particular cost center if it already assigned the accounts?
Ans: Suppose, you are making an expense voucher on the car maintenance cost. you already created a cost center with the type car. Now how will you put the impact on that cost center
From there in the account information selecting the debit expense account, Selecting the center (Debit) and Center (credit) Car X2010 is the name of the center which was created under cost center so it will put the impact on that particular cost center and show the report and analysis
After completing the voucher process and approving the voucher now since you already assigned the account under that center so now visiting to that center profile and on the general ledger of that cost center you can see a ledger transaction of that expense voucher. The screenshot is given below for understanding
From the screenshot you can see on that particular cost center in the general ledger the information is showing of the expense of 20,000 which was done.
Also you can see the analysis section by clicking on the analysis tab
4) How to tag a cost center manually for a particular expense voucher?
Ans: In order to tag a cost center manually to a specific expense voucher, First go to accounts-->General Ledger. The screenshot is given below for the first process of understanding
In order to tag a particular cost center, first choose the basic type as expense and click on the search filter. After that all the expense voucher will be shown in the list page then click on a particular voucher for tagging, Then a window will appear as shown below:
From the add Tag field select the category type as cost center and then choose the type and then select the Cost center name of on the tag where you want to put impact. After filling up the field click on the add button and then automatically in the Ledger Tags the information will be generated of cost center and type with the amount and the tag name. Click on save for finishing tagging process.
After saving you can see the name has already been tagged on that particular expense voucher.