Overview

When a company performs cost center accounting, all the costs must be distributed across cost centers. However, when you register costs, you cannot determine to which cost center the costs are allocated. Therefore, you can initially book the costs on a primary cost center, and perform the allocation to the correct cost centers, later on.

You can initially book general costs such as insurance, energy and IT support on the primary cost center Administration and periodically allocate to the main cost centers such as the Production department and the Sales department.

If costs in Financials are booked on dimensions (cost centers), these costs can be allocated periodically to other dimensions. The cost allocation between the primary cost center and the various departments can be based on a fixed amount or on percentages

You must define allocation relations between various dimensions for each period. These relations can be used for the periodic cost allocation.

You must import the actual costs from the General Ledger. These costs are allocated using the Cost Price Iteration process, and the results are integrated with General Ledger.