What is a Cost Center?
Cost center is a unit used to track where expenses occur within a company.
A cost center is an organizational unit used to collect and track costs. Unlike a profit center, a cost center does not directly generate revenue — its purpose is cost visibility and control.
Examples
| Cost center | Typical costs |
|---|---|
| Sales | Personnel, travel, entertainment for sales activity |
| IT | Software, servers, maintenance |
| Tokyo office | Rent, utilities, supplies |
| Project A | Outsourcing and materials for a specific project |
Using cost centers in WorkVell
- 1.Register: Admin → Budget Management → Cost Centers (code, name, parent, owner).
- 2.Link budget lines: assign each expense line to a cost center.
- 3.Compare with actuals: linked to expenses and payroll for real-time budget vs. actual.
FAQ
Is a cost center the same as a department? Not necessarily — one department may split into several cost centers (e.g., by project), or several departments may roll up into one.
Can I use budgets without cost centers? Yes. You can budget at the company or department level and adopt cost centers later as you scale.
cost centerbudgetexpense trackingdepartmentprofit center
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