Distributed Cost Center

Using a Distributed Cost Centre in ERPNext, you can post expenses across multiple Cost Centres based on predetermined percentages. This is convenient when costs are shared among departments, branches, or projects, such as when IT expenses are posted across Sales, Support, and R&D Cost Centres.

 

You can post shared expenses accurately and avoid the hassle of manually dividing them by setting up distributed cost centres.

How to make a Distributed Cost Center

1. Go to: Accounts > Budgeting and Cost Centres > Distributed Cost Centre
2. Click New.
3. Enter the following details:
   • Name of Distributed Cost Centre (e.g., IT Expenses Allocation).
   • Business.
4. Add a row for each cost centre in the Distribution Table and indicate their share:
   • Select the Cost Centre.
   • Enter the Percentage Allocation (for example, R&D 30%, Support 30%, and Sales 40%).
5. Confirm that 100% is the total allocation.
6. Save the Distributed Cost Centre.

Applying Distributed Cost Centre

• The Distributed Cost Centre can be used instead of a single Cost Centre when reporting expenses (for example, in Journal Entry or Purchase Invoice).
• Based on the specified distribution, ERPNext will automatically divide the expense into several GL entries.

Reports and Analysis

Reports like these appear when Distributed Cost Centres are enabled.

 

• Profit and Loss Statement
• Budget Variance Report
• General Ledger

Related Topics

• Cost Center

Follow for more

• Go to Zikpro ERPnext Demo
• www.zikpro.com