The term "cost centre accounting" refers to the recording, allocation, and analysis of costs by organisational units within a company, such as departments, locations, business units, projects, or responsibility areas. The aim is to make overhead costs transparent, monitor budgets, and evaluate the cost efficiency of individual areas of the organisation.
Cost Centre Management: Creating, maintaining, and structuring cost centres by department, location, business unit, or area of responsibility.
Cost Allocation: Assigning costs to individual cost centres based on postings, documents, accounts, or predefined rules.
Cost Distribution and Apportionment: Allocating overhead costs across several cost centres using keys such as floor space, number of employees, machine hours, or revenue share.
Plan vs. Actual Comparison: Comparing planned costs with actual costs to identify and analyse deviations.
Budget Monitoring: Tracking cost centre budgets and detecting budget overruns at an early stage.
Internal Service Charging: Charging internal services between cost centres, such as IT services, administration, maintenance, or production support.
Cost Centre Reporting: Creating reports, key figures, and analyses for controlling, management, and specialist departments.
Hierarchies and Responsibilities: Mapping cost centre structures, responsible persons, and approval workflows.
Interfaces with Accounting and ERP Systems: Transferring posting data, account information, and master data from connected business systems.
A manufacturing company assigns energy costs, maintenance costs, and personnel costs to individual production departments.
A public administration or corporate office distributes building costs to departments based on office space used.
A retail company monitors the costs of individual branches and compares them with planned budgets.
An IT department charges internal service costs to different business units.
The controlling team analyses cost variances by cost centre to identify savings potential and the causes of additional expenses.