Cost centres use Branches (required for Cost Centres) and Tracking Categories for focused tracking of expenses and purchases in your accounting partner. This article covers what you need to know to set up cost centres and make them work for you .
Cost centres can be set against Tracking Categories, which is a term known by different names depending on the accounting partner see the table below to match the Uptick name with the name used by your accounting partner.
Note: Tracking categories will only appear for the default accounting partner. If you only have one integration enabled and don't see the tracking categories on the Cost Centre configuration, click Control Panel > Accounting > Make default
Creating a new Cost Centre
Depending on how your system is set up, a cost centre in the system may or may not be integrated with your finance system - but you would still be able to use the field
- Click Control Panel > Cost Centres
- Click Create new item
- Fill out the following fields:
Name The name of the cost centre. Branch Search and select from existing Branches. A Branch must selected in order for the Cost Centre to apply to tasks upon generation automatically. Task category This will restrict the cost centre to only apply to the chosen task category Account Code The code relevant for this Cost Centre, based on the accounting partner's chart of accounts. Tracking category Tracking categories from your accounting partner Default
Toggle on/off. In order for Cost Centres to be applied to tasks automatically it must meet the following conditions:
- The Cost Centre must have a Branch
- More than one Cost Centre can only be applied to the same Branch if the task categories differ between them
- Click Save changes
Setting the Cost Centre manually on a Task
- From a Task, click Update
- Select ‘Edit’ next to the task you wish to add the cost centre for
- Under the Assignments section click on the Costcentre field and select from the drop-down list. You can type in the field to filter down your options.
4. Click Save Task to update the changes.
Understanding cost Centres and Account Codes
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 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
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.
Combining Cost Centre and Product Account Codes (Invoices Only)
Product account codes have the highest priority, so if you use a full account code number this will override the default account account code. You can however have your product account codes set up so that when a cost centre is applied to a task, the cost centre code and product account code will combine to form a new number, where the product account code overwrites the tail end of the cost centre account code. This number should match an existing account code that is part of the chart of accounts in your accounting partner.
See the diagram below to understand how these two numbers work together (examples are based on Xero). This allows you to get specific account codes when invoicing, allowing you to have more precise tracking and analytics in the accounting partner.