The cost center is the area or business unit where the expenses that the company needs are produced and controlled . In other words, it is a financial section, with an assigned budget, where the company's expenditures are recorded and tracked.
It is an instrument used to identify the costs of the company and carry out an individual control.
In general, Odoo has a budget that includes all the costs that can be investigated down to the cost center, such as office supplies, salaries, insurance costs, telephone calls, computers, fuel expenses, among others.
Costs can be more easily monitored with budgeted figures.
Cost center in Odoo
The cost centers in Odoo are represented by Analytical Accounts
The goal is to examine costs, sales, and margins by department/resource and by product. The first level of the structure encompasses the different departments, and the levels that represent the product ranges that the company makes and sells.
Analytical accounting can be used for many purposes:
Analyze the costs of a company
Re-invoice time to a client
Analyze the behavior of a service or a project
Example of an analytical chart of accounts for a company in the Manufacturing Industry:
Production Range 1
Production Range 2
The analytical representation by department allows you to investigate the costs assigned to each department in the company. The analytical chart of accounts shows the distribution of the company's costs using the example above:
In this example of a hierarchical structure in Odoo, you can analyze not only the costs of each product range, but also the costs of the entire production. A report that links both general accounts and analytical accounts allows you to get a breakdown of costs within a specific department.
Analytical accounting helps you analyze costs and revenues in any use case.
You can sell or buy services, log time, or analyze production performance.
Analytical accounting is flexible and easy to use in all Odoo applications (Sales, Purchase, Timesheets, Manufacturing, Billing, Payroll, Budgets, etc.).
If you want to know more about the subject, visit our webinar where our colleague Evelyn Martínez takes a tour of the Odoo cost center: Manage a cost center with Odoo