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Set-up Cost Centres

Overview

Cost Centres allow you to analyse your accounts in additional ways, such as by office or department. You can already analyse your Durell accounts under named, or “Nominal”, account headings, such as by…
• Telephones
• Stationery
• Commission
• Fees, etc

With Cost Centres you can add up to three more levels of analysis, such as for…
• Office (e.g. Telephone costs in Taunton, Bournemouth, etc)
• Business Line (e.g. Fees from Personal Lines, Fees from Investments, etc)
• Sales Department (e.g. Earnings & Costs by Team A, Team B, etc)

Note
1. Cost centres are optional, can be ignored, and do not need to be setup
2. Cost centres may be added retrospectively
3. The setting-up is done via Accounts / Setup / Cost Centres (and Nominal Accounts)
4. All of the Balance Sheet, Trial Balance, P&L, Spreadsheet and Solvency reports may by analysed by Cost Centre, simply by selecting one, as shown below…

 

Cost Centre Headings

Use the “Cost Centres” tab in “Accounts / Setup” to add headings for your cost centres. For example, Cost Centre 1 might be for your three or four departments (e.g. Mortgages Dept, etc), while Cost Centre 2 (like that shown below) might be for the locations of your different offices (e.g. Bournemouth, Taunton, etc). If you’re only using two (out of the possible three) cost centres, then leave the “In use” tick-box clear for the third one (and it won’t appear in your ledgers).

 

 Allocate Percentages to Nominals

Still in “Accounts / Setup”, at the bottom of the tabs for “Sales Nominals” and “Purchase Nominals” you’ll find three dropdowns for the default Cost Centre values to be applied to each nominal account. So using the nominal account for “Telephones” as an example, you might allocate 100% of all such costs to a particular Business Line in your Cost Centre 1, but allocate only 30% of it to your smaller office in Cost Centre 2 (e.g. Bournemouth, as shown below) and 70% to the larger office.

 

Once you’ve entered percentages for all of the Cost Centres (in use) for every one of your nominal accounts (i.e. both sales and purchases), then you should click the button to “Pass cost centre defaults to ledgers & regular payments”, as shown below…

 

This pop-up will pass the percentage allocations to all of the existing invoice lines in your Sales and Purchase Ledgers, and optionally you can also use it to automatically populate your Regular Payments. In the event that you subsequently decide the percentages for one of your nominals is incorrect (e.g. the split between Taunton & Bournemouth for Phones should be 50/50 instead of 70/30) then you can choose to just update that (i.e. the current nominal) account in the ledgers. You can also use this pop-up to clear all current cost centre details, or to only update ledger lines currently without cost centre values in them.

Note
1. The above process only passes the default percentage values to the ledger lines for ongoing use, which is typically done only once when you first start using cost centres. In order to complete this initial phase you must also run the “Accounts / Setup” Signpost Button option to “Rebuild / Trail & Totals from Ledgers”. The latter process is quite slow, and best done in the evening when no other staff are using the system. In contrast the former task (of passing the default percentages) only takes minutes, and can be done at any time.
2. These “default” percentages are just your best guess at an average division of the invoices between cost centres. Going forward it will be possible (as shown below) to override these, so for example a particular phone bill for Fred’s mobile who works in Taunton can be individually allocated 100% to the Taunton office. However if you’ve got a couple of years of historic invoices you probably won’t want to edit them all individually, and hence the defaults will have to suffice.
3. The same applies to Regular Payments, to which you can pass the default splits, then if needs be you can edit them individually to override known exceptions.

Invoices in the Ledgers

If, as in the illustration below, you’ve setup two cost centres as active then they’ll appear as dropdowns per invoice line, with default values that you can choose to override.

When you save an invoice all of its nominal and cost centre values automatically update the reporting totals, so you only need to run the option to “Rebuild / Trail & Totals from Ledgers” when you first start using cost centres. Moreover you may freely edit any existing invoices and change the default percentages where they’re clearly wrong.

Regular Payments

Similarly, after you’ve passed default values to your Regular Payment records, you can edit them individually, as shown below…