Cost centres
A cost centre is the accounting dimension your balances and income roll up to. It carries the general ledger code you reconcile to, and it belongs to one operating entity.
A cost centre is not a branch. A branch says who looks after the customer; a cost centre says which set of books the money lands in. The two often start out matching, and they drift apart as soon as the bank reorganises. Keeping them separate means you can move a branch without moving a penny.
What you see
Open an operating entity and select Cost Centres under Accounting. Each row shows:
| Column | What it tells you |
|---|---|
| Code | The short name your finance team uses |
| Description | What the centre is for |
| GL reference | The general ledger code this centre reconciles to |
| Status | Draft, Open, or Closed |
| Pending moves | How many accounts are still due to leave this centre or arrive on it |
A move counts at both ends, so one account moving between two centres of the same entity raises the count on each. A centre showing no pending moves is one nothing is scheduled to change.
A Draft centre is defined but not yet in use. Only an Open centre can carry a posting.
Select a row to open that cost centre’s own screen.
Setting up a cost centre
To add one:
- Open the operating entity and select Cost Centres.
- Select Register cost centre.
- Enter the code, the description, and the general ledger reference. All three are required — a centre with no general ledger reference has nothing to post against.
- Select Register.
The new centre starts as Draft. Use Actions on its row to open it when it is ready to carry postings. Until you do, no account can be moved onto it.
A code must be unique within the operating entity, among centres that are not closed.
Each of the code, the description, and the general ledger reference is a separate act, so your organisation may require a second person to approve some and not others.
Changing the general ledger reference re-maps the centre’s whole history, not just what it posts from today. The reference is the current mapping; entries resolve it when they are read.
A closed cost centre cannot be edited.
Opening one cost centre
A cost centre has its own address, so you can link to one. Put that link in a finding or an email and it still opens the same centre months later.
The heading shows the code, the description, the status, and what the centre carries:
| Figure | What it tells you |
|---|---|
| Assets | What the accounts on this centre hold, per currency |
| Liabilities | What those accounts owe, per currency |
| Total | Assets less liabilities |
These are the same three figures the operating entity’s own heading shows, summed from the same accounts. Where an operating entity has one cost centre, every account it carries is on that centre, so the two headings read the same.
The figures come from the accounts, not from the ledger, so they do not add up to the Balances table below. That table states the centre’s general ledger balances, which include income and equity; the heading states positions held.
Five panels sit beneath:
| Panel | What it answers |
|---|---|
| Details | The code, description, general ledger reference, and owning entity |
| Accounts | Which accounts carry this centre today |
| Scheduled Moves | Which accounts are due to leave it or arrive on it, and when |
| Balances | What the centre holds, by general ledger account |
| Entries | What has moved through it |
Scheduled moves
Accounts answers “what is on this centre today”. Scheduled Moves answers “what is about to change”. Each row names the account, whether it is leaving or arriving, the centre at the other end, and the date it takes effect.
Both directions are listed together, because an arrival you cannot see is the reason a centre you believed was emptying is not.
Select Cancel on a row that is leaving to call the move off. The account stays where it is and nothing is posted. A row that is arriving is the same move read from the other end, so it is cancelled from the centre it leaves, not from this one.
A move drops off the list once it is posted — which is end of day on the day before it takes effect. From the effective day it is history, and the account is simply on its new centre. Cancel it before that evening’s day end, or it has already moved.
Actions offers the centre’s verbs — open it, edit it, change its code or general ledger reference, and close it. A verb you cannot use yet is greyed rather than hidden, and it tells you which status is blocking it. The same menu appears on each row of the Cost Centres panel, so you can amend several centres without opening each one.
Choosing the cost centre when you open an account
The cost centre is a fact about the account’s books, so you name it when those books are opened — in the opening wizard, beside the posting group. The wizard creates the draft account and opens its books in one go.
Where the operating entity runs a single open cost centre, you are not asked: the account takes it. Where it runs several, you choose one. Where the account type is not on the books at all — no posting group names it — neither field appears, no books are opened, and the account activates without any.
An account cannot be activated until its books are open. If you meet that refusal, open the books first; the message says so.
Reading an account’s cost centre
Open the account and select Balances under Accounting. Above the trial balance, a header names the posting group and the cost centre in force today.
Beneath it is the account’s cost centre history: every centre it has been on, from the day the books opened, each with the date it took effect. A move you have scheduled for a future date appears last, marked Pending.
Cancel is the only action a history row offers, and only the pending row offers it. A centre the account has already been on is a posted fact — the way to change where it posts next is another move, not an edit.
Move cost centre on the same header is where a move starts. It asks for the centre and the effective date, and nothing else on the account offers it: the Details panel and the account toolbar name no posting group and no cost centre at all.
How a posting gets its cost centre
Every account on the books carries a cost centre, and every posting takes the cost centre the account had on the posting’s value date. That date matters: a payment value-dated last month lands in the centre the account was in last month, not the one it is in today.
Both sides of a posting carry the centre. The balance sheet side and the income side both belong to the centre, because a cost centre exists to collect a profit and loss.
Once a posting is made, its cost centre never changes. Back-dating a move changes where future postings land; it does not re-tag what has already been posted.
Reading one cost centre’s figures
The Balances and Entries panels both narrow to a single cost centre. Narrowed, they show only what that centre carries; left alone, they answer for the whole operating entity exactly as before.
A move between centres appears in both centres’ entries — under the one the balance left and the one it arrived in. That is deliberate: it is the entry you open the panel to find when you want to know where a balance went.
Moving an account to another cost centre
When an account moves to a different cost centre, what the account owns moves with it and what the old centre earned stays behind. The system posts a movement out of the old centre and into the new one for each general ledger account affected.
Every entry the move posts is dated the day it posts, value date and trading date alike. The effective date decides what moves; it never dates an entry. Nothing is written back into a day the books have already reported on, so a report you ran last month still reads the same after a move.
A move you schedule for next month posts nothing today. It posts at end of day on the day before its effective date, so the balances have already arrived on the new centre when that day opens — and its entries are dated that day.
What moves and what stays
| What the old centre holds | Where it goes |
|---|---|
| Balances the account owns or owes — principal, accrued interest receivable, funding | Moves in full to the new centre |
| Income earned before the effective date | Stays with the old centre |
| Income earned on or after the effective date | Moves to the new centre |
| Prior years’ earnings, already swept at year end | Stays, unless the move is backdated into those years |
Income belongs to the centre that earned it, in the period it earned it. A branch that writes a loan keeps the fee it charged, even after the loan is transferred elsewhere. Otherwise a centre’s income statement could be emptied by a transfer it had no say in, and you could not hold anyone to a number.
The effective date is the day the new centre starts owning the account, so income dated on that day moves with it.
An example. A loan sits on the Riverside centre with 1,000 of principal outstanding, 10 of interest receivable and 950 of funding. Riverside earned 10 of interest this period, and 50 of earnings from earlier years were swept at the last year end. You move the account to Lakeside, effective today.
Lakeside takes the 1,000, the 10 receivable and the 950 funding. It also takes this period’s 10 of interest income, because the effective date is today. Riverside keeps the 50 from prior years.
Correcting an account booked to the wrong centre
There is no separate correction. You move the account and set the effective date to the day its books opened. Every day of the account’s life is then on or after that date, so all of its income follows the balance and the old centre is left flat — which is the truth, because it never earned any of it.
If the correction reaches back into a year that has already been closed at year end, the system restates that year’s earnings between the two centres. It posts one restatement for each closed year that earned anything, dated today and stamped with the year it belongs to, so you can still see which year each amount came from. Closed years are never reopened, and no entry is dated into one.
That stamp is how you read a comparative. A report for a closed year shows what that year reported at the time. To see where the earnings sit now, read the restatement in today’s figures and the year it names.
A correction that reaches into a closed year needs a retained earnings account on the account’s posting group. That account must be typed Equity — retained earnings is last year’s income, not an asset, and a centre’s balances read wrong if it is typed anything else. If none is set, or it is typed otherwise, the move is refused and the message names the posting group to go and configure.
Preview before you confirm. A backdated correction posts as soon as you confirm it, and it cannot be cancelled afterwards — only a move whose date has not yet arrived can be cancelled. Read the figures on the move dialog before you confirm, especially the year you typed.
Moving an account to a different branch posts nothing at all. Reorganising the branch network is not an accounting event.
The book has to be able to carry the move
Each moving balance posts against the cost centre transfer account on the account’s posting group, twice: once clearing the row on the centre the account is leaving, once opening it on the centre it is joining.
The two centres’ transfer balances are always equal and opposite. They do not both net to zero, and that is expected: the old centre keeps income with no balance behind it, and its transfer balance is what stands against that income so its books still balance. Read it as an amount owed between the two centres. If the two are not equal and opposite, the transfer is broken and worth raising.
A posting group that names no transfer account cannot carry a move, so the move is refused and the message names the posting group you have to go and configure. Set the account on the posting group, under Settings, and try again.
You are told this while you are making the change, not afterwards. That holds for a move you schedule for a future date as well: the refusal reaches you when you schedule it, not at the end of day that posts it, where nobody would be there to read it.
One consequence to know about. The check runs when you schedule the move. If somebody clears the transfer account off the posting group between then and the effective date, the scheduled move is no longer one the books can carry.
Everything the account holds here moves with it — its balances, and the income it has earned this period. That is what makes a period’s result land on the centre holding the account at period end, rather than splitting one account’s year across two centres.
A closed period is not disturbed. What a period close already swept to this centre’s retained earnings stays here, for ever. So the answer to “what did this centre contribute last year” does not change when an account leaves this year. The centre’s own screen says so beneath its balances.
stateDiagram-v2
direction LR
[*] --> Draft: Defined
Draft --> Open: Opened for business
Open --> Closed: Closed
Closed --> [*]Closing a cost centre
You can close a cost centre once nothing is on it. If accounts still carry it, the close is refused and the message names the accounts blocking you.
The Accounts panel on the centre’s own screen lists exactly those accounts, and each row opens the account. So the refusal tells you what is in the way, and the panel beside it lets you go and look at each one.
An account scheduled to leave next month still blocks the close today — it is on the centre until the move takes effect. A closed account does not block it.
After a closed centre, its code is free again. Finance can retire a code and give the same one to a new centre later.
What your organisation configures
- The cost centres themselves — their codes, descriptions, and general ledger references.
- Which cost centre each account belongs to, and when it moves.
- Whether your organisation runs more than one cost centre per operating entity at all. Without this capability you still get one, because the general ledger code lives on it, and accounts take it without anyone being asked. The Balances header then names the posting group only — no centre, no history, and no move.
- Which cost centre an operating entity gives to accounts the system provisions for itself, where that entity runs several. Money arriving that nobody has yet claimed has no region of its own, so it sits in the centre you designate until the item is identified and cleared out to the customer’s account.