Cost Center

Overview

Cost Center – Business Overview

The Cost Center is a foundational business setup document in Dafater that helps organizations track income and expenses separately for different parts of the business. It allows management to clearly see how each division, department, product line, or business unit is performing financially.

Rather than viewing finances only at a company-wide level, the Cost Center enables more detailed financial control and performance analysis.

What the Cost Center Is Used For

The Cost Center is used to: - Track expenses and income by department, division, branch, or product vertical
- Measure profitability of specific business units
- Support budgeting, cost control, and financial accountability
- Provide management with clear visibility into where money is earned and spent

It acts as a financial “bucket” where transactions are grouped for reporting and analysis.

Prerequisites and Setup Requirements

Before using the Cost Center, the following should be in place: - The company structure should be defined (such as departments, branches, or business lines) - Accounts and financial categories should already exist - A clear understanding of how the business wants to analyze costs and revenues

Cost Centers are typically created during initial financial setup or when a new business unit is introduced.

Typical Workflow and Business Fit

Create Cost Centers
Cost Centers are set up for departments, divisions, projects, or product lines (for example: Sales, Marketing, Manufacturing, Retail Division).
Assign Cost Centers to Transactions
When recording expenses, income, or operational transactions, users select the relevant Cost Center.
Ongoing Financial Tracking
As daily operations continue, all related costs and revenues are automatically grouped under the assigned Cost Center.
Review and Analysis
Management reviews reports by Cost Center to compare performance, control spending, and identify profitable or underperforming areas.

This workflow integrates seamlessly into daily accounting and financial decision-making.

Key Business Scenarios Where Cost Center Is Essential

Department-wise expense control
Understand how much each department is spending and whether it aligns with budgets.
Product or service profitability analysis
Track which product lines or services generate profit and which need improvement.
Branch or regional performance monitoring
Compare financial performance across locations or regions.
Management reporting and decision-making
Support strategic decisions such as expansion, cost reduction, or restructuring.
Budget planning and variance analysis
Compare planned versus actual costs at a granular level.

Important Considerations for Users

Define Cost Centers thoughtfully to avoid unnecessary complexity
Use consistent naming to make reports easy to understand
Avoid creating too many Cost Centers unless they add clear business value
Review Cost Center performance regularly, not just at year-end
Ensure staff consistently select the correct Cost Center during transactions

In Summary

The Cost Center is a critical business tool in Dafater for gaining control over financial performance at a detailed level. When used correctly, it transforms raw financial data into meaningful insights, helping businesses operate more efficiently and make informed decisions.

Track separate Income and Expense for product verticals or divisions.

Basic Information

Module: Accounts
Document Type: Setup

Fields

Field Name	Label	Type	Required	Options	Description
costcentername	Cost Center Name	Data	✓	-	Name identifying the cost center for reporting in Dafater
costcenternumber	Cost Center Number	Data		-	Unique reference number for the cost center in Dafater
parentcostcenter	Parent Cost Center	Link	✓	Cost Center	Parent cost center for hierarchical reporting structure in Dafater
company	Company	Link	✓	Company	Company to which this cost center belongs in Dafater
is_group	Is Group	Check		-	Indicates whether this cost center groups child cost centers in Dafater
disabled	Disabled	Check		-	Marks the cost center as inactive for use in Dafater
lft	lft	Int		-	Left index for cost center tree hierarchy in Dafater
rgt	rgt	Int		-	Right index for cost center tree hierarchy in Dafater
old_parent	old_parent	Link		Cost Center	Previous parent cost center used during hierarchy changes in Dafater

Permissions

Role	Read	Write	Create	Delete
Sales User	✓
Auditor	✓
Accounts Manager	✓	✓	✓	✓
Purchase User	✓
Accounts User	✓
Employee

DocType	Relationship	Module
Account Closing Balance	Linked from	Accounts
Asset	Linked from	Assets
Asset Capitalization	Linked from	Assets
Asset Repair	Linked from	Assets
Asset Value Adjustment	Linked from	Assets
Branch	Linked from	Setup
Budget	Linked from	Accounts
Company	Linked from	Setup
Cost Center Allocation	Linked from	Accounts
Delivery Note	Linked from	Stock
Department	Linked from	Setup
Dunning	Linked from	Accounts
Dunning Type	Linked from	Accounts
Employee	Linked from	Setup
Expense Claim	Linked from	HR
GL Entry	Linked from	Accounts
Gratuity	Linked from	Payroll
Leave Encashment	Linked from	HR
Loan	Linked from	Loan Management
Loan Balance Adjustment	Linked from	Loan Management
Loan Demand	Linked from	Loan Management
Loan Disbursement	Linked from	Loan Management
Loan Interest Accrual	Linked from	Loan Management
Loan Refund	Linked from	Loan Management
Loan Repayment	Linked from	Loan Management
Loan Write Off	Linked from	Loan Management
Loyalty Program	Linked from	Accounts
Opening Invoice Creation Tool	Linked from	Accounts
POS Invoice	Linked from	Accounts
POS Profile	Linked from	Accounts
Payment Entry	Linked from	Accounts
Payment Ledger Entry	Linked from	Accounts
Payment Reconciliation	Linked from	Accounts
Payment Request	Linked from	Accounts
Payroll Entry	Linked from	Payroll
Process Payment Reconciliation	Linked from	Accounts
Project	Linked from	Projects
Purchase Invoice	Linked from	Accounts
Purchase Order	Linked from	Buying
Purchase Receipt	Linked from	Stock
Real Estate	Linked from	Dafater Property Management
Real Estate Unit	Linked from	Dafater Property Management
Sales Invoice	Linked from	Accounts
Sales Order	Linked from	Selling
Shipping Rule	Linked from	Accounts
Stock Reconciliation	Linked from	Stock
Subcontracting Order	Linked from	Subcontracting
Subcontracting Receipt	Linked from	Subcontracting
Subscription	Linked from	Accounts
Subscription Plan	Linked from	Accounts
Supplier Quotation	Linked from	Buying
Travel Request	Linked from	HR
Company	Links to	Setup
Cost Center	Links to	Accounts