Cost Center Recharch
- Thread starter Janagan
- Start date
A "cost centre" is a code allocated to a specific business area and will have employee costs etc posted to that code.
However, at times, for example, certain employees might work between different cost centres but their salaries will have been coded to their base cost centre in full. But because they've worked in another cost centre, then a recharge of the amount of time they worked in the other cost centre needs to be done.
The reasoning behind this type of recharging is that each cost centre will have budgets to be working to and therefore cannot take the whole expense of an employee who also worked in another cost centre, therefore, the time spent working in the other cost centre is recharged to it.
The overall effect being, for example:
Person A is coded to Z9999, and their monthly salary of £1000 is coded there. But, they worked 50% of their time on X9999. So, a recharge is done to reallocate 50% of person A's salary from Z9999 to X9999, that way both cost centres bear their actual share of the salary cost.
That's a simple example of a recharge out from one cost centre to another. In reality, other cost centres will probably be doing their own recharges as well, so you have both recharges out and recharges in to whatever cost centre(s) you're responsible for.
However, at times, for example, certain employees might work between different cost centres but their salaries will have been coded to their base cost centre in full. But because they've worked in another cost centre, then a recharge of the amount of time they worked in the other cost centre needs to be done.
The reasoning behind this type of recharging is that each cost centre will have budgets to be working to and therefore cannot take the whole expense of an employee who also worked in another cost centre, therefore, the time spent working in the other cost centre is recharged to it.
The overall effect being, for example:
Person A is coded to Z9999, and their monthly salary of £1000 is coded there. But, they worked 50% of their time on X9999. So, a recharge is done to reallocate 50% of person A's salary from Z9999 to X9999, that way both cost centres bear their actual share of the salary cost.
That's a simple example of a recharge out from one cost centre to another. In reality, other cost centres will probably be doing their own recharges as well, so you have both recharges out and recharges in to whatever cost centre(s) you're responsible for.
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