Understanding cost centres and account codes

Article author
Aleks Petrovic
  • Updated

The global settings for the accounting partner has income and expense codes, and so do cost centres so how do they differ?

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Default income and expense accounts

The default account codes will track incoming and outgoing finances but will not make distinctions between the type of profit and expenses. When no cost centre is set against the task, invoicing will use the codes set as defaults in your accounting partner integration as viewed in Control Panel > Accounting.

 

Cost Centres

Important note: Only one cost centre can be set against a task. Due to the overriding nature of cost centre account codes, this can create issues when selling products with differing account codes as all the income/expense activity will be solely associated with that cost centre. You will need to take this into consideration when deciding to set a cost centre against a task.

Cost centres allow you to set specific categories that will feed into profitability calculations, allowing you to have more precise overview of your business running costs. The benefits of a cost centre are:

  • Associating each cost centre with a tracking category according to your accounting partner
  • Setting specific income and expense accounts that are different to the default accounting settings
  • When a cost centre is set against a task, it will override default income and expense account values and use those instead

If the task has a cost centre applied, invoicing and purchase orders will use the respective income and expense accounts associated with the cost centre. 

 

This activity will also track and you will see a Cost Centre column in the profitability table.

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This column can also be dragged to group profitability data by cost centre.

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