Assigning Cost Centers to Accounts
The system lets you assign one or more cost centers to any account in the chart of accounts, with a percentage for each center, so the amount of every transaction on that account is distributed across the cost centers automatically. You can do this for any account, including VAT accounts (output and payable), and expense, revenue and other accounts.
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Note: Make sure the Accounting app is enabled, that you have permission to manage cost centers, and that you’ve created the sub Cost Centers you need.
Contents
Assigning cost centers to an account
- From the main menu, click Accounting, then Cost Centers.
- Click Manage Cost Centers, and choose Accounts without Cost Center.
- Find the account you need, and click Assign Cost Centers next to it.
- On the Assign Cost Center page, enter for each line:
- Cost Center: only sub cost centers appear.
- Percentage: the share of each transaction on the account that’s charged to this center.
- Auto: on by default, so the distribution is applied automatically with every entry on the account.
- To add another cost center, click Add.
- Click Save.
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Note: Make the percentages total 100% so the whole amount is distributed. If the total is less than 100%, the remaining part isn’t distributed to any cost center. Don’t exceed 100%.
What does the Auto option mean?
| Option | What happens |
|---|---|
| Auto on | When you save any entry with a line on this account, the line amount is distributed automatically across the cost centers at the set percentages. This includes manual entries and automatic entries from invoices, expenses and others. |
| Auto off | The distribution isn’t applied automatically; the cost centers appear as a suggestion when you add cost centers to an entry line manually. |
Example: a rent account has two centers: Main Branch 70% and Jeddah Branch 30% (Auto). When you record a rent expense of 1,000, 700 is charged to Main Branch and 300 to Jeddah Branch.
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Note: The automatic distribution isn’t applied to a line if you entered cost centers for it manually in the entry; in that case the manual distribution is used.
Assigning cost centers to VAT accounts
Yes, you can link the output VAT account (sales tax) or the input VAT account (purchases and expenses) to one or more cost centers with a percentage for each, using the same steps as any other account.
- Open Accounts without Cost Center, and find the tax account (each tax has two accounts under current liabilities: one for sales and one for purchases and expenses).
- Click Assign Cost Centers, add the cost centers and their percentages, and turn on Auto.
- Click Save.
Example: you linked the VAT (sales) account to two centers: Project A 60% and Project B 40%. When you issue an invoice with tax of 150:
| Entry line | Amount | Project A (60%) | Project B (40%) |
|---|---|---|---|
| VAT credit | 150 | 90 | 60 |
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Important: The cost center you choose in the invoice header or for each item applies only to the sales lines, not to the tax line. So the only way to distribute the tax across cost centers automatically is to link the tax account itself to cost centers, as described in this section.
Editing or deleting an account’s cost centers
- Open Manage Cost Centers › Cost Center Accounts. For each account, the list shows the account and its code, the cost center and its code, and the percentage.
- Click the account to edit the centers or percentages, or delete a line from the page, then save.
- To remove the distribution completely, select the lines in the list and click delete.
Tracking the effect of the distribution
- Cost Centers Report: shows the amounts distributed to each cost center.
- Cost Center Transactions: shows every transaction distributed to cost centers.
- From the entry itself: the cost centers appear in the entry lines.
Notes
- The distribution applies only to new entries and to entries that are saved again. The distribution of earlier entries doesn’t change automatically. To apply it to an earlier entry, edit the entry or its document and save it.
- Assigning cost centers at account level is separate from the Cost Center Distribution Rules in the accounting settings, which control showing the cost center column for each item in invoices and requisitions.
- The maximum is 100% when you enter cost centers manually in entries and documents, unless you turn on Allow Cost Center Distribution to Exceed 100%.
FAQ
Can I add a percentage when linking a cost center to a VAT account?
Yes. Tax accounts work like any other account: assign cost centers to them with the percentages you need and turn on Auto, and the tax amount in every entry is distributed across the centers at those percentages.
I assigned cost centers to the account, but old entries weren’t distributed?
The distribution isn’t retroactive. It applies to new entries, or when an entry or its document is saved again.
I chose a cost center in the invoice. Why doesn’t it appear on the tax line?
Because the cost center in the invoice applies only to the sales lines. To distribute the tax, link the tax account to cost centers.
Why doesn’t a cost center appear in the assignment list?
Only sub cost centers appear; main cost centers can’t be assigned directly.