Cost Centres

Overview

The Cost Centre module is used to calculate your production Hourly Rates using the Overhead, Equipment, Labour and Maintenance Costs as well as the Productivity of the Cost Centre. 

A Status is used to manage Cost Centres from Pending, Active to Cancelled. Pending and Cancelled Cost Centres that were previously selected will be visible in the Cost Centre lookups (highlighted in red), but you will not be able to select a Cost Centre unless it is in an Active Status. Warnings are displayed in the Items and Pricing modules to identify where Cancelled Cost Centres are in use.

Overheads, from Active Cost Centres, are automatically apportioned according to the total cost of the Cost Centre. You are, however, able to override the Overhead allocation.

Pending and Cancelled Cost Centres don't attract Overheads.

The assigned costs, which can be captured as weekly, monthly or annual, are converted to a monthly cost and then to an hourly rate based on productivity: hours worked per week and productive weeks per annum. 

You are able to override the Hourly rate by checking the Fix checkbox next to it.

Navigation depends on where the module was added to the Menu.

Fields

• Description

• Code - Max 10 characters, ideally use 3 characters - the Code is used in forms where space is limited.

• Type - Options include:

  • Overhead - Amounts in overhead cost centres will automatically be apportioned to the Production Cost Centres.

  • Production - Your productive, billable Cost Centres

  • Accounting - Used for Accounting purposes only.

• Entity - If you use multiple Entities, you can link Cost Centres to Entities. Overheads will be apportioned to the same Entity only.

• Hours/Week - Productive hours per week. Eg. in a standard 40-hour shift, you might only have 32 productive hours (80%). If the Cost Centre is working a double shift, you might have 64 productive hours.

• Weeks/Annum - Start with 52 and deduct public holidays and your annual shutdown period, if applicable.

Costs

Multiple costs can be assigned to a Cost Centre by week, month or per annum and allows for the following Types:

• Equipment - A finance calculator is provided to generate an assumed monthly cost even if the equipment has already been paid off.

• Labour - Total labour cost if the Cost Centre was fully staffed.

• Maintenance

• Other - for example, the fuel for a Delivery Cost Centre.

Workstations

Workstations are used for production planning and tracking.  You can add as many Workstations as you need to a Cost Centre and set which one is the default. When Transactions are updated to the Planning Board, Services will be assigned to the default Workstation linked to the Service's Cost Centre. You can also select a Workstation when using the Tracker Planning Board Timekeeping model.

Notes on Overheads

The Cost Centre model allows you to allocate Overheads to the Production Cost Centres. This should only be done if the large majority of your turnover is generated from production. If you do a lot of outsourced work or reselling that does not go through your production facility, it is better to exclude overheads from your hourly rates in favour of recovering them through an additional markup.

Settings

Add the module to the Menu: Type = Fixed; Module = Cost Centres.

Settings > Users > Setup > Cost Centres - Access Allowed (Y/N)