Cost centre breakdown examples

Here are two sets of examples of cost centre breakdown:

Posting examples which use values to explain the effect of cost centre breakdown in more detail.

The following examples use values to explain the effect of cost centre breakdown in more detail. All these examples use a standard VAT rate of 17.5%.

Example 1 (purchase invoice) demonstrates posting to the Nominal Ledger when the full nominal account codes are specified (account code, cost centre and department) in the defaults.

Purchase invoice with cost centres

Purchase invoice with cost centres
Your nominal accounts are set up as follows, the first three listed are set up in default nominal accounts and the fourth is set up on the supplier account record. The invoice analysis uses 44100 FAC STD (Profit and Loss).
	Default creditors control	24100	ADM	ADM	(Balance Sheet)
	Default VAT input	15100	ADM	ADM	(Balance Sheet)
	Default purchases	44100			(Profit and Loss)
	Default nominal account	44100	FAC	STD	(Profit and Loss)
You enter a purchase invoice with the following values:
	Net	1000.00
	VAT	175.00
	Gross	1175.00
The nominal postings will be as follows.
1.1 Cost centre breakdown is not selected
	Creditors control	Cr 1175.00	24100	ADM	ADM
	Default VAT input	Dr 175.00	15100	ADM	ADM
	Default purchases	Dr 1000.00	44100	FAC	STD
With this example, if you choose to report by cost centre, the results will appear not to balance in your nominal reports.
1.2 Cost centre breakdown is selected
	Creditors control	Cr 1175.00	24100	FAC	STD
	Default VAT input	Dr 175.00	15100	FAC	STD
	Default purchases	Dr 1000.00	44100	FAC	STD
With this example if you choose to report by cost centre FAC, your nominal reports will balance.

Example 2 (purchase invoice) demonstrates posting to the Nominal Ledger when the cost centre and department elements of the default nominal codes are left blank.

Purchase invoice without cost centres

Purchase invoice without cost centres
Your nominal accounts are set up as follows, the first three listed are set up in default nominal accounts and the fourth is set up on the supplier account record. The invoice analysis uses 44100 FAC STD (Profit and Loss).
	Default Creditors Control	24100			(Balance Sheet)
	Default VAT Input	15100			(Balance Sheet)
	Default Purchases	44100			(Profit and Loss)
	Default Nominal Account	44100	FAC	STD	(Profit and Loss)
You enter a purchase invoice with the following values:
	Net	1000.00
	VAT	175.00
	Gross	1175.00
The nominal postings will be as follows.
2.1 Cost centre breakdown is not selected
	Creditors Control	Cr 1175.00	24100
	Default VAT Input	Dr 175.00	15100
	Default Purchases	Dr 1000.00	44100	FAC	STD
With this example, if you choose to report by cost centre FAC, the results will appear not to balance in your nominal reports.
2.2 Cost centre breakdown is selected
	Creditors Control	Cr 1175.00	24100	FAC	STD
	Default Input VAT	Dr 175.00	15100	FAC	STD
	Default Purchases	Dr 1000.00	44100	FAC	STD
With this example, if you choose to report by cost centre FAC, your nominal reports will balance.

Example 3 (sales invoice) demonstrates posting to the Nominal Ledger when the full nominal account codes are specified (account code, cost centre and department) in the defaults.

Sales invoice with cost centres

Sales invoice with cost centres
Your nominal accounts are set up as follows, the first three accounts listed below are set up in default nominal accounts, and the fourth is set up on the customer account record. The invoice analysis uses 31100 SAL DLR (Profit and Loss).
	Debtors control		14100	ADM	ADM	(Balance Sheet)
	Default VAT output		26100	ADM	ADM	(Balance Sheet)
	Default sales		31100			(Profit and Loss)
	Default nominal account		31100	SAL	DLR	(Profit and Loss)
You enter a sales invoice with the following values:
	Net		1000.00
	VAT		175.00
	Gross		1175.00
The nominal postings will be as follows.
3.1 Cost centre breakdown is not selected
	Debtors control	Dr		14100	ADM	ADM
	Default VAT output	Cr		26100	ADM	ADM
	Default sales	Cr	1000.00	31100	SAL	DLR
With this example, if you choose to report by cost centre SAL or ADM, the results will appear not to balance in your nominal reports.
3.2 Cost centre breakdown is selected
	Debtors control	Dr		14100	SAL	DLR
	Default VAT output	Cr	175.00	26100	SAL	DLR
	Default sales	Cr		31100	SAL	DLR
With this example, if you choose to report by cost centre SAL, your nominal reports will balance.

Example 4 (sales invoice) demonstrates posting to the Nominal Ledger when the cost centre and department elements of the default nominal codes are left blank.

Sales invoice without cost centres

Sales invoice without cost centres
Your nominal accounts are set up as follows, the first three accounts listed below are set up in default nominal accounts, and the fourth is set up on the customer account record. The invoice analysis uses 31100 SAL DLR (Profit and Loss).
	Debtors control		14100			(Balance Sheet)
	Default VAT output		26100			(Balance Sheet)
	Default sales		31100			(Profit and Loss)
	Default nominal account		31100	SAL	DLR	(Profit and Loss)
You enter a sales invoice with the following values:
	Net		1000.00
	VAT		175.00
	Gross		1175.00
The nominal postings will be as follows.
4.1 Cost centre breakdown is not selected
	Debtors control	Dr	1175.00	14100
	Default VAT output	Cr	175.00	26100
	Default sales	Cr	1000.00	31100	SAL	DLR
With this example, if you choose to report by cost centre SAL, the results will appear not to balance in your nominal reports.
4.2 Cost centre breakdown is selected
	Debtors control	Dr	1175.00	14100	SAL	DLR
	Default VAT output	Cr	175.00	26100	SAL	DLR
	Default sales	Cr	1000.00	31100	SAL	DLR
With this example, if you choose to report by cost centre SAL, your nominal reports will balance.

Example 5 (purchase payment) demonstrates a cash transaction using the Cash Book. Postings to the Nominal Ledger are shown when the full nominal account codes are specified (account code, cost centre and department) in the defaults.

Purchase payment with cost centre

Purchase payment with cost centre
Your nominal accounts are set up as follows, the first two are taken from default nominal accounts.
		Code	C/c	Dept
	Default bank account	16800	ADM	ADM	(Balance Sheet)
	Default creditors control	24100	ADM	ADM	(Balance Sheet)
	Discount taken account	34200			(Balance Sheet)

	Bank account (from bank record in Cash Book)	16801	ADM	ADM	(Balance Sheet)
	Default account (from supplier record in Purchase Ledger)	44100	FAC	STD	(Profit and Loss)
You enter a purchase payment for £1175.00 with a discount of £60.00. The nominal postings will be as follows.
5.1 Cost centre breakdown is not selected
	Default bank account	Cr 1175.00	16801	ADM	ADM
	Default creditors control	Dr 1235.00	24100	ADM	ADM
	Discount taken account	Cr 60.00	34200	FAC	STD
5.2 Cost centre breakdown is selected
	Bank account	Cr 1175.00	16801	FAC	STD
	Default creditors control	Dr 1235.00	24100	FAC	STD
	Discount taken account	Cr 60.00	34200	FAC	STD

Example 6 (purchase payment) demonstrates a cash transaction using the Cash Book. Postings to the Nominal Ledger are shown when the cost centre and department elements of the default nominal codes are left blank.

Purchase payment without cost centres

Purchase payment without cost centres
Your nominal accounts are set up as follows, the first two are taken from default nominal accounts.
		Code	C/c	Dept
	Default bank account	16800			(Balance Sheet)
	Default creditors control	24100			(Balance Sheet)

	Bank account (from bank record in Cash Book)	16801			(Balance Sheet)
	Default account (from supplier record in Purchase Ledger)	44100	FAC	STD	(Profit and Loss)
You enter a purchase payment for £1175.00. The nominal postings will be as follows.
6.1 Cost centre breakdown is not selected
	Bank account	Cr 1175.00	16801
	Default creditors control	Dr 1175.00	24100
6.2 Cost centre breakdown is selected
	Bank account	Cr 1175.00	16801	FAC	STD
	Default creditors control	Dr 1175.00	24100	FAC	STD

Make sure that all your nominal accounts exist in the Nominal Ledger to prevent any postings going to the Suspense Account. This will ensure that you obtain balancing Nominal Ledger reports for cost centre reporting when using cost centre breakdown.

If you use the Split postings between cost centres for balance sheet accounts setting, make sure that your default nominal accounts for Creditors Control and Debtors Control are not set to use a specified account with a cost centre. To check this:

Open: Nominal Ledger > Utilities > Ledger Set Up > Default Nominal Accounts.

Select the Balance Sheet tab.
Make sure the Use Specified setting is set to No for both the Creditors Control and Debtors Control accounts.