RisingERP - Cost Centre Allocation

Cost Center Allocation

Cost Center Allocation in RERP is a feature that allows the splitting of general ledger entries associated with a cost center into multiple cost centers. Within the Cost Center Allocation document, you can specify allocation percentages for the child cost centers.

In the context of a growing business, analyzing income and expenses against each business unit becomes essential. To achieve this, each business unit is treated as a cost center, and income/expenses are booked against these cost centers. However, manually splitting transactions at the transaction level can be challenging. The Cost Center Allocation feature simplifies this process.

In RERP, defining the allocation between multiple cost centers (business units) against a specific master/main cost center is all that is needed. Subsequently, when booking an invoice or expense transaction against the main cost center, the system automatically splits it based on the defined allocation and posts general ledger entries against each child cost center.

1. How to Create a Cost Center Allocation?

1. Navigate to the Cost Center Allocation list view and create a new Cost Center Allocation.
2. Enter the Main Cost Center to be used in the transaction.
3. Specify Valid From and Valid Upto to track the validity of the allocation.
4. In the child table, input child cost centers and their respective allocation percentages.
5. Save and Submit the document.

2. GL Entries against Transactions When booking any transaction against the main cost center, the system automatically splits the GL Entry associated with it and generates multiple GL entries based on the applicable cost center allocation record.

Note: GL Entries against a Sales Invoice have been split based on the Cost Center Allocation, providing a clear breakdown of transactions associated with different cost centers.