teamspace has three cost centre types (final, service and salary cost centre) and two cost object types (final and intermediate cost object). The type is a fixed master data field. It determines whether an object counts in the totals, whether an allocation distributes it down to zero and where it may allocate to. Choose the types correctly and you get the allocations and the principle “Σ cost centres = Σ cost objects” almost for free.
Cost categories: the “what?”
A cost category describes what kind of cost or revenue has arisen. Via its group it belongs to one of three kinds:
- Revenue: fees, fixed-price, licence and maintenance revenue.
- Costs: personnel, external services, material costs, imputed costs.
- Secondary: the cost categories for repostings and allocations, usually in class 9000.
Cost categories have no owner. Their posting type (Primary posting or Secondary posting) separates the cost categories coming from outside from those used for repostings and allocations. You can build them as a tree, for example 6000 Personnel costs with 6100 and 6500 below it. A ready-made proposal with classes from 4000 to 9000 is in the Sample chart of cost categories for service providers.
Cost centres: the “where?”
Using the field Parent cost centre, cost centres form a tree, for example 2000 Service delivery with the leaves 2100 Consulting and 2200 Development. You only post to leaves. The nodes above them only add up. You can also organise cost centres using the fields Categories and Group, for example by service delivery, management, sales and administration.
| Type | What for | Counts in the totals | Allocation allowed to | Balance after the run |
|---|---|---|---|---|
| Final cost centre | area that bears costs: consulting, development, support | yes | – | remains |
| Service cost centre | area that provides services for others: IT, administration, management | yes | cost centres | 0 |
| Salary cost centre | technical clearing account for personnel costs | no, hidden | cost objects | 0 |
The salary cost centre is a special case: it only holds salaries without a cost object. Time bookings relieve it hour by hour; the remainder is allocated to the projects. That is why it is the only cost centre that may allocate to cost objects. It also records which department it belongs to, so that hours and utilisation are still attributed to the right department. Do not place it under the department in the tree, otherwise the node adds up the relief as well. Details in Allocate personnel costs via a salary cost centre.
Cost objects: the “what for?”
Cost objects are flat, with no tree. For service providers, the cost object is usually the project or the contract.
| Type | What for | Counts in the totals | Allocation allowed to | Balance after the run |
|---|---|---|---|---|
| Final cost object | customer project, contract, internal project | yes | – | remains |
| Intermediate cost object | collectors and pools: servers, licences, vehicles, acquisition | yes | cost objects | 0 |
Among other things, a cost object holds the following in its master data:
- Owner cost centre: the area the cost object belongs to organisationally (see below).
- Service basis: external (customer service) or internal (own project).
- Group and Metrics view: the group organises cost objects, e.g. by sales, service delivery or internal operations; the metrics view (
Financial yearorTotal term) determines whether the metrics show the year or the whole term. - Target project: the project through which the cost object knows its customer.
- Allocation weight: the value (default 1.00) with which it counts as the target of an allocation.
What may flow where?
Movements stay within their view: from cost centre to cost centre or from cost object to cost object. The only bridge is the salary cost centre.
| Route | Allowed | Typical use case |
|---|---|---|
| Reposting cost centre → cost centre | ✓ | reclassification, margin share for another department |
| Reposting cost object → cost object | ✓ | splitting a trip between two customers |
| Allocation service cost centre → cost centres | ✓ | IT, administration, management to the areas |
| Allocation intermediate cost object → cost objects | ✓ | servers, licences, pools to the contracts |
| Time booking and allocation salary cost centre → cost objects | ✓ | salary and remainder to the projects |
| Reposting or allocation normal cost centre → cost object | only with switch | no sensible use case, counts twice |
The cross-route from a normal cost centre to a cost object is controlled by the switch Cross-posting (cost centre/cost object). Why it should stay off is explained in Two views, one result.
Customer view via the target project
Who makes money with which customer? For that you need the contribution margin per customer across all projects and contracts. In teamspace, every cost object reaches its customer via the target project. All evaluations per customer run through it, including repostings and allocations, because they are attached to the cost object as well. You do not need a separate tool for this.
Owner view: who works for whom?
A time booking carries two pieces of information: the cost centre of the person (who provides the service?) and the cost object (what for?). The cost object in turn knows its owner cost centre (who does the project belong to?). This creates a second view of every cost centre without any additional posting.
Example: Anna from development builds the new website for marketing. She books 8 hours to the internal project INT-MARK-WEB. Valued at €50/h, that is €400.
This answers two questions:
- From the project’s point of view: Which departments worked on INT-MARK-WEB? The movements of the cost object grouped by cost centre show: development €400.
- From marketing’s point of view: Who from outside worked on our projects? All cost objects with owner = 4200, their postings grouped by cost centre. Everything that does not come from marketing is external: here €400 from development.
The cost accounting analysis can group by owner cost centre for this: view Cost object, under Group in the view settings.
Together this gives you the cross table “who works for whom”. If a project moves to another area, you only change one master data field.
Common questions about working for other areas
Does this make development look worse? No. If the employees’ cost centre is a salary cost centre, it is relieved for every hour booked, no matter for whom.
Who gets the margin? The owner department. If the department providing the service is to receive a share, repost it from cost centre to cost centre (see Repost an amount).
What happens when someone changes department? Nothing changes in the past. The cost centre is stored on every time booking. An employee’s department is stored as time-dependent data (see Org chart & departments).
What happens when a project moves to another area? The owner cost centre is not versioned. The history moves with it to the new area.
Is it charged at the internal cost rate or with a mark-up?
At the internal cost rate. You post a mark-up for the department providing the service as a reposting with its own cost category, for example 9400 Internal charge mark-up.
Notes
- The type is a fixed master data field. Choose it deliberately when you create the object, because it controls the permitted allocation targets.
- You set the visibility of the fields Category, Group and Type under
Configuration → Finance → Settings → Cost accounting(see Set up cost accounting).
Related topics
- Set up cost accounting: create cost categories, cost centres and cost objects Cost accounting Configuration
- Two views, one result: the core principle of cost accounting Cost accounting Concept
- Set up an allocation rule Cost accounting Configuration
- Allocate personnel costs via a salary cost centre Cost accounting Configuration
- Topic: Cost accounting Cost accounting
- Cost centre accounting with teamspace