Distributed Cost Center
Using a Distributed Cost Centre in ERPNext, you can post expenses across multiple cost centres according to predetermined percentages.
When costs are shared by multiple departments, branches, or projects, such as when IT expenses are posted across Sales, Support, and R\&D cost centres, this is convenient.
You can post shared expenses accurately and avoid the hassle of manually dividing them by setting up distributed cost centres.
Distributed Cost Center
Go to: Accounts > Budgeting and Cost Centres > Distributed Cost Centre
Click New.
Enter the following details:
Name of Distributed Cost Centre (e.g., IT Expenses Allocation).
Business.
Add a row for each cost centre in the Distribution Table and indicate their share:
Select the Cost Centre.
Enter the Percentage Allocation (for example, R&D 30%, Support 30%, and Sales 40%).
Confirm that 100% is the total allocation.
Save the Distributed Cost Centre.
Applying Distributed Cost Centre
The Distributed Cost Centre can be used instead of a single Cost Centre when reporting expenses (for example, in Journal Entry or Purchase Invoice).
Based on the specified distribution, ERPNext will automatically divide the expense into several GL entries.
Reports and Analysis
Reports like these appear when Distributed Cost Centres are enabled.
Profit and Loss Statement
Budget Variance Report
General Ledger