Cost centers and budgets

The idea

A cost center is a label for one part of the business. A budget sets how much a cost center (or project) may spend on one account in a fiscal year, and what happens when it goes over. Screens use example data from a demo company.

Step by step

Step 1. See the cost centers

1. Open the Cost Center tree. The company is at the top, then a group, then the cost center Main.
2. Open Main: it has a parent and Is Group is not ticked, so costs can post to it.

Step 2. Open a budget

1. Budget Against offers a cost center or a project.
2. Here the account is Utility Expenses, the amount $12,000 for 2026, split equally into 12 months of $1,000.

Step 3. Look at the actions

1. In Control Action, choose Stop, Warn or Ignore for material requests, purchase orders and actual expenses.
2. Here every action is Warn: people are told but not blocked. The message itself is not shown (never triggered).

Step 4. Check the variance

1. Open Budget Variance Report. Budget $12,000, actual $5,800, variance $6,200.

What you may see on your own site

• Your own cost centers, accounts and amounts.
• Stop blocks, Warn shows a message, Ignore does nothing.

Common mistakes

1. Budgeting a group and a leaf twice.
2. Choosing Stop before people know the budget. Start with Warn.
3. Never opening the variance report.