Skip to main content
Help Center

Cost accounting (KLR)

The model behind cost category, cost centre and cost object – how teamspace allocates costs rule-based and where the limits lie.

Cost accounting (KLR – Kosten- und Leistungsrechnung) is part of internal accounting: it looks at costs and outputs from the internal value creation. Unlike financial accounting, it is not mandatory and is less regulated. Its purpose is controlling: to allocate costs to their originator and so review and optimise the cost-effectiveness of internal processes.

This article explains the KLR model and how teamspace implements it. The actual reports are described in Financial reports and Project reports.

The three ordering criteria

KLR distinguishes three criteria – they are the heart of the model:

  • Cost categories divide costs into categories (e.g. material, personnel).
  • Cost centres designate the areas/departments in which the costs arose (e.g. production, service, marketing).
  • Cost objects are the products or services produced, to which the costs are allocated (e.g. manufacturing, installation, maintenance).

On these build the three classic stages: cost-category accounting (which costs?), cost-centre accounting (where did they arise?) and cost-object accounting (what for?). Direct costs go straight into cost-object accounting, overheads are first distributed across cost centres.

How teamspace implements KLR

In teamspace there are four element types that represent positive or negative monetary relationships: financial items, times, cost elements and postings. All have been extended so that they enable a flexible, rule-based allocation of cost category, cost centre and cost object.

When creating such an element you can view or change the KLR information directly – assuming you have the relevant rights. As far as possible, the allocations are pre-filled automatically: the system draws, in a fixed order, on various information sources that can be configured per element type.

An example of the setting for cost elements:

Cost category: 1. Expense type
Cost object:   1. Project
Cost centre:   1. Employee   2. Customer

Here the cost category is determined by the type of expense (material, travel costs, etc.), the cost object is the customer project, and the cost centre is initially the employee – if no fixed cost centre is provided for them, the system next considers the customer.

What you get from it day to day

The rule-based mechanism allocates costs more precisely and with little effort. In many lists – e.g. Project times – cost category, cost centre and cost object can be shown as active columns and filtered by. This way you identify cost drivers or particularly profitable products directly in the report.

Where the limits lie

teamspace provides an overview of the allocation of primary costs to cost category, cost centre and cost object. Not supported are:

  • internal cost allocation in the sense of distributing cost centres via secondary costs,
  • the distribution of overheads.

For these more advanced procedures, KLR in teamspace is not designed.