Cost Centres

The chart of accounts answers "what was this spend" (utilities, marketing, maintenance). A cost centre answers a different question on the same entry: "which activity carried it" — the kitchen, the dining floor, the delivery operation, a project.

When to use them#

Skip cost centres until a real question demands them. The questions that do:

• "What does delivery actually cost us, across all the expense categories it touches?"
• "How much did the renovation really cost, spread over three months of invoices?"
• "Which of our two concepts inside this location is profitable?"

If your reporting is happy with the expense categories alone, stay simple.

How they work#

Define the cost centres; tag vouchers (and voucher lines) as they're entered; report by cost centre to see spend collected across accounts. The tag never changes where an amount posts — only how it can be sliced afterwards.

Cost centres vs the branch dimension#

They answer different questions and coexist: the branch dimension attributes a line to a location's books (with inter-branch balancing); a cost centre attributes it to an activity. "Head office paid the flagship's kitchen renovation" uses both — branch: flagship, cost centre: renovation.