Let us begin with Setups and Masters.
Setups and Masters
Cost Accounting Setup
In a basic scenario, we can define the start date (ideally when the system is being implemented) and rest of the setups based on how we want to post cost related entries in cost accounting. For the example we will see in this tutorial, below is the setup.
Chart of Cost Centers
Create all the cost centers in this master. These can be your locations, offices etc. for which you would like to see cost accounting.
Chart of Cost Objects
The cost objects are like your items or services that you want to list down. This is very important. In this example we are using Software account, and the objects will be word, excel and power point.
Now Let’s use above to create Chart of Cost Types
Chart of Cost Types
This can be copied from G/L chart of accounts or created manually. You can create it manually and then separately link G/L Account or multiple G/L Accounts.
Notice the G/L account we are taking as an example here and how it is liked to the ‘Cost Type’. Please note that we can have multiple G/L accounts associated with one Cost Type and vice versa.
Posting Cost Entries in G/L
We will take example of the case in which we post entry for Software G/L and then allocate the balance to 3 different objects.
Let’s post an entry with Rs. 80
After this entry is posted, the next step would be to allocate the software cost to different software programs like Word, Excel and Power Point.
Cost Allocations
First go to ‘Cost Allocations’ master which you will need to create for all the cost that need such allocation. This will be one time activity for you to create it and then run it frequently to post cost entries.
Below is the one we will use in this example. If you are creating new, then click new and fill the details.
Once we open the Cost Allocation card we find the following information,
In the above screenshot, you will find that we have allocated cost in 3 with different percentage. Hence, Rs. 80 will be split accordingly.
Note that the accounting entry is already posted, and we are taking ‘Base’ as ‘G/L Entries’ as highlighted in the above screenshot.
You do not have to link this to G/L entries. You can post cost allocation independently as well if you prefer. You can also have a mix of both to have your cost allocation entries to include everything that is posted in G/L and also the ones that you know should be part of the allocation but does not have to be same way in G/L entries.
Now, let’s run the allocation,
Once you finish running the allocation, we will be able to see the cost entries posted through that action.
As you can see the cost allocation has happened, and Cost Entries are created with the allocation percentage which we had defined for them. Here 8310 is the Software Cost Type and 2013, 2014 and 2015 are Word, Excel and Power Point respectively.
Conclusion
The cost accounting in business central can be used in place of typical allocations by Dimensions which normally businesses prefer more. If you would like to have separate reporting for cost accounting that should not be posted in the G/L with such allocation and split, you can use this feature. It provides you the flexibility to allocate however you want without affecting your core accounting and reporting.
There are multiple reports available to view your cost entries. And since you have detailed Cost Entries you can simply run the pivot or use copilot to see the data the way you want to see.
