Cost centers are an effective way to track and analyze the costs of your business with greater accuracy. Adding them allows you to collect and monitor expenses related to a specific department or branch. By analyzing these costs, you can make informed financial and operational decisions, such as identifying departments or employees that may need improvements to enhance their sales performance and reduce expenses. While cost centers do not directly generate profits, they play a crucial role in managing expenses efficiently. On the Rewaa platform, you can easily add and use cost centers.
Adding Cost Centers
To add a cost center, follow these steps:
Go to Settings > Finance and click on the arrow next to Cost Centers.
Click on New Cost Center.
Enter the following details:
Category Name: Enter the primary category under which cost centers will be classified (e.g., "Riyadh office").
Category Options: Add the specific cost centers under the category (e.g., "Marketing & Advertising," "Employee Salaries").
Click Save. The cost centers will be added and ready for use.
ℹ️ You can use cost centers for purchase invoices, expenses, and journal entries.
How to Use Cost Centers
Assigning a Cost Center to a Purchase Invoice
When adding a purchase invoice, click the arrow in the Cost Centers field.
Select the appropriate cost center.
Click Assign, then proceed with issuing the purchase invoice.
Assigning a Cost Center to Expenses
When adding an expense, click the arrow in the Cost Centers field.
Select the relevant cost center.
Click Assign, then proceed with adding the expense.
Assigning a Cost Center to Journal Entries
When entering journal entry details, click the icon next to the Description field.
Select the cost center.
Click Assign, then complete the journal entry process.
Editing or Deleting Cost Centers
After adding cost centers to the Rewaa platform, you may need to modify or delete them to align with your company's cost allocation structure. Properly adding cost centers ensures the accuracy of financial reports, helping you make data-driven decisions.
Editing Cost Centers
Go to Settings > Finance and click on the arrow next to Cost Centers.
Click on the Edit (🖊) icon.
You can modify the following:
Category Name.
Category Options: Change the name of an existing cost center.
Add a new cost center by clicking the (+) button.
Delete a cost center within the category by clicking the (🗑️) icon.
Once done, click Save. The updates will take effect immediately.
Deleting a Cost Center
Click on the (🗑️) icon next to the cost center.
Confirm the deletion by clicking Delete. The cost center will be removed from the platform.
⚠️ Important Note: Deleting a cost center does not affect previously linked transactions such as purchase orders or expenses. However, the cost center name will be removed, meaning you will no longer be able to filter reports or retrieve purchase and expense data based on that cost center.
FAQs
1. How do I track cost centers?
Use financial reports and filter by the desired cost center. For more on financial reports, click here.
2. Is there a limit to adding cost centers?
No, you can add unlimited cost centers.
3. Can I assign multiple cost centers to invoices, expenses, or journal entries?
Yes, just select all relevant cost centers and click Assign.
4. Can I assign cost centers after saving data?
Yes, you can assign them anytime to invoices, expenses, or journal entries.
5. If I change a cost center’s name, will it update everywhere?
Yes, the new name will replace the old one automatically.
6. I deleted a cost center by mistake, can I recover it?
No, deleted cost centers and their data cannot be restored.
7. Will deleting a cost center affect financial reports?
No, but you won’t be able to filter by that cost center anymore.