A cost center is a logical division within your agency’s operations for purposes of management, analysis, and financial reporting. Using cost centers allows you to track revenue and expenditures that cross multiple funds and/or projects.
Many agencies choose not to use cost centers. Most agencies that do choose to use them define cost centers by administrative department, e.g., Administration, Tenant Services, Utility Expenditure, Direct Maintenance, Protective Services, etc. Agencies can also define them by office location, by individual project, or by groups of related projects.
If you choose to use cost centers, you should first plan which cost centers you would like to use and create a cost center code for each of them. The codes can be up to eight numbers and/or letters. Each code must be unique, but they must all follow the same pattern (e.g., a two-digit number).
Cost Center is an optional segment in your account numbers. After you have planned your cost centers, you should define and activate the cost center segment. This includes defining your specific criteria for the cost center codes; enter the same criteria you used when planning your codes (the exact number of characters and whether letters and/or numbers are allowed).
Note: If you choose not to use cost centers, verify that the cost center segment is not included in your account numbers.
For help on defining the cost center segment of your account numbers, See "Planning Account Segmentation" and See "Maintaining Account Segments".
After you have activated the cost center segment, set up the cost centers themselves. You will create one cost center record for each of your cost centers.
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