Cost Center

Introduction

cost center is to bear the cost and expense control, the responsibility of the assessment center is to be the cost of collection, distribution, controlling costs, liability assessment units, namely cost controllable duty units. Controllability here is associated with specific responsibility center, rather than the nature of certain costs inherent in the project.

Summary

organizational structure, each sector (i.e., the third layer structure of the tissue) are articulated with one or several cost center. In the transaction, you can put different costs into different cost centers, accounting to a division of a region, a product line, or even the cost of a project team, and organizational structure, as a cost center has a similar three-tier structure, the former two main categories and subcategories of the cost center (corresponding to the document directory), the third layer is a particular cost center; cost center may be classified differently according to different perspectives; system, there are four different default cost center classification Methods. To see the cost centers and departments have been mounted, click the tissue in the human resources module, the organizational chart system settings is displayed, select a department, click the department icon, select the "cost center" in the organization chart.

defined

cost center is the responsible only responsible for the cost of their units. Refers to the responsibility center is only responsible for the costs or expenses. The widest range of cost centers, wherever there is the cost of expenses incurred, can create cost centers, thereby forming a step control in the enterprise, layers of responsibility cost center system. Most of the production is only responsible for the production sector, the labor department or give a fee to provide indicators of business management department.

cost center (cost center) or called cost centers (expense center). It refers to the unit imputation and allocation of costs. Industrial enterprises in order to divide the production department belongs costing terms of reference and cost control, usually set up a number of cost centers. Cost center only cost control, duty free sales control.

Type

According to different classification methods can be divided into

1, the composite basic cost center and cost center.

is not under the former cost center, such as a cost center is a section, which has a number of subordinate cost centers. The basic cost center responsible for its controllable costs higher level of responsibility centers.

2, the technical and cost centers discretionary cost center.

technical cost is the cost of the amount of occurrence can be relatively reliably estimated by the analysis technique, such as the materials occurs directly in the production process, direct labor, manufacturing overhead and the like. Technical costs between inputs and output quantity closely linked, can be controlled by a flexible budget. Discretionary costs has occurred and how many occurrence amount is determined by the management decision-making of the decision, including a variety of management fees and certain indirect costs of the project, such as research and development expenses, advertising costs, staff training fees. Discretionary costs have no direct relationship between the amount of input and output volume controls should focus on the approval of the total budget.

Features

Cost Center has only to consider the cost, only take responsibility for controllable costs, only the liability cost assessment and control features. Wherein the controllable cost three conditions, i.e., can be expected to be metered and can be controlled.

principles

in the daily course of business stream, stream management required by applying various techniques and methods to improve the efficiency of logistics, to reduce the cost of stream object. Therefore, cost center should follow the following basic principles in their daily control: 1. Cost control and quality control of the principle of combining

purpose is to strengthen the logistics cost control logistics management, logistics facilitate rationalization. Logistics is reasonable depends on whether the two sides, namely the quality of customer service management level; the other is the level of logistics costs. If you only pay attention to reduce logistics costs, it may affect the quality of customer service, it does not work. Therefore, while carrying out the logistics cost control, we must improve the quality of service control and logistics cost control combined to correctly handle the relationship between the reduction of logistics costs and improve the quality of service, from the optimal combination of the two, seeking to improve the efficiency of logistics .

2. Local control and overall control of the principle of combining

where said local control means to control the logistics cost function or a part of the consumption, and the system control means controlling the overall cost of the total stream. Logistics costs of the most important principle is the total cost of control. Logistics as the nature of the entire system is sufficient, which requires the whole system and various auxiliary systems combined organic performs overall control.

3. Full control and focus control principle of combining

logistics system is a multi-link, multi-field, multi-purpose constituted a full range of open systems. This feature logistics system is also fundamentally requires us to cost control, we must follow the principle of overall control. The overall emphasis on logistics cost control, not asking all the factors will unavoidably affect the cost of the lift, are equal to control them, but should be in accordance with the principles of project management of coral, the implementation of key control.

4. The principle of economic control and control technology combining

This is to ask the daily management and logistics costs combined with economic laws, integrated management and control of logistics costs. Logistics cost is an economic category, implementation of logistics cost control, must follow the economic laws, widespread use of information, bonuses, quotas, and other sectors of the economy and profit responsibility settlement, performance evaluation and other economic means. At the same time, logistics management is a highly technical management.

5. The principle of professional control and full control of a combination of

cost control and logistics departments of logistics costs form is necessary, which is one of the basic responsibilities of these departments. With the full cost control, forming a smooth tight cost control logistics network, which can effectively grasp of all aspects of the logistics costs during the formation and aspects, practice strict economy, eliminate waste, reduce logistics costs and logistics to ensure the rationalization measures .

evaluation index

Cost Center include cost (cost) changes in the amount and cost (cost) rate of change in two indexes

costs (expenses) Change amount = actual liability costs (expenses) - responsibility cost budget (expense)

amount cost (expenses) rate of change = cost (cost) change / liability costs budget (expense) × 100%

in each maturity accounting system, one of the most important issues is a set cost center (cOST CENTER), in particular, there are multiple entities, multiple business units of the Group . The following is the basic elements of a foreign system cost center:

1 and the cost center code name, code, have a unified rule, such as letters or numbers eight, two front, rear and intermediate 2. What should have uniform rules several delegates.

2. Legal entity (ENTITY) the cost center belongs

3. Region (the REGION) and the service unit (BUSINESS UNIT)

4. Accounting Platform number, in order to accurately identify

when multiple systems combined 5. cost cost Center attributes, attributes such as cost of sales cost of sales, expenses property market sector market cost.

6. Cost center managers, ie directly responsible

7. Monitoring Manager (CONTROLLER)

8. Does anyone head (HEADCOUNT), and the number of head

9. this cost allocation cost center to do if all other cost centers

plan

R3 system of management accounting and financial accounting and in management accounting treatment of a variety of business-related expenses, the main contents are: the establishment of a variety of master data maintenance, cost planning and budgeting, cost-sharing and distribution, adjustment costs, handling internal orders, expense reports and other inquiries, this we should focus on mastering the curriculum plan and budget costs, allocation and distribution query, reporting costs. Financial Accounting (FI) is a direct demand information for outsiders, such as tax authorities, financial institutions, etc., according to the FI can program different balance sheet, in order to meet the information needs of external diameter, while the control (CO) is used for the internal organization management, is to meet the information needs of management decisions by determining the true costs and the actual situation within the organization. Financial Accounting (FI) strictly abide by the legal system and the accounting rules used by external personnel, control (CO) according to the needs of internal management, flexible adjustment of the external accounts, used to insiders.