Cost Center best practices

We have Wholesale distribution setup for multiple items. there are regional offices in different areas along with warehouses. Each office maintain its own expenses and purchases and sales and stock management. we need help how can we use cost center to obtain financial reports of each each office and as well as cumulative also is there any way we can restrict users to not mess around with other cost center.

I can’t speak to the permissions question, I am still learning it as well. Here are my thoughts on the other part.

There are a couple ways you would will want to break things out, but this my thinking. Clearly you are going to want to have warehouse records for each of your warehouses so you can track stock at each location. You could then have a cost center for each warehouse so when a sales invoice is created for the items you can capture by row where each part is coming from. That way you can source an order from more than one warehouse if needed. This is where tracking item stock by warehouse comes in really handy. I would also assume each of these warehouses has it own labor, so by creating a cost center for each location will allow you to not only see sales and income by warehouse, but also total expenses and profitability. Remember you can nest cost centers into groups. For example maybe you have a east and west region and each region has two warehouses. You could create a top level warehouse operations cost center, then below that create an east and west region cost centers and then below each of those create the actual warehouses. Then in reports like profit and loss you can pick top level to see everything or drill in and see by region or by specific location.

As a side note, if you create sales territories in the same fashion then it would be easy to set sales targets for same areas that you are tracking actuals against.

Essentially your cost center tree, warehouse tree and sales territory tree should all match.

Hope this helps.


Really appreciate your thoughts … very helpful. thanks