Cost centre

Definition

It is the second dimension alongside the chart of accounts: the account says what kind of expense arose, the cost centre says where. Only together do they permit statements like «the Bern branch does not cover its costs».

The most frequent mistake is too fine a breakdown. Forty cost centres in a ten-person business create assignment work without any gain in insight. Five that you can actually steer are worth more.

What the software must be able to do

Check whether cost centres can be captured on every entry — in payroll and fixed assets too, not only in the general ledger — and whether the income statement can be output per cost centre.

Checked Aug 2026

More terms under Bookkeeping and retention: Accrual principle Accrued liabilities Annual accounts Association accounting Balance sheet Balance sheet total Book value Break-even point Business assets Business expenses Cash book Cash flow statement Cash receipts Contribution margin Current assets Debit and credit Depreciation Double-entry bookkeeping Duty to keep accounts EBIT EBITDA Equity Equity ratio Financial year Fixed assets Fixed costs Foreign currency General ledger Gross profit Hidden reserves Income statement Inventory count Journal Journal entry Liabilities Liquidity Loss carry-forward Membership dues Net profit Opening balance sheet Overheads Pass-through item Prepaid expenses Provision Record-keeping ordinance Reserves Retained profit Simple accounts Swiss SME chart of accounts Tamper resistance Turnover Value adjustment Variable costs Volunteer-run structure Voucher Year-end closing modules