Cost Centers

Cost Centers are used for financial management and accounting purposes. They represent distinct business segments or departments within a unit. Each Cost Center is an organizational unit where costs are accumulated. This could be a department or other segment that needs separate tracking for budgeting and financial reporting. Cost Centers are crucial for tracking expenses, budgeting, financial reporting and internal accounting. They help us allocate and monitor expenditures and revenues within an organization, providing a clear picture of financial performance by segment. 

Cost Centers are units within an institution used to house and manage financial transactions, budgets and workers. Often these are departments or sub-departments within a legacy (older/former) system.  

A Cost Center should have one clearly defined responsible person (e.g., cost center manager), a clearly defined financial impact and its own defined budget.  

Cost Centers do not drive how people are managed in Human Capital Management (HCM and payroll functions). People management is based on Supervisory Organizations. Cost Centers can be rolled into hierarchies to assist with security roles and reporting purposes.