About Cost Center, Profit Center, Service ..

Hi,
   I have found an article as the follow show. I can not catch on. Anyone else
help me to detail it?
Thank you.

Cost Center, Profit Center, Service Center in Compiere
Traditionally, Cost Centers were used to allocate costs to different parts of the organization. The newer concepts of Profit Centers also include the revenue side. Service Centers extend this concept sometimes giving internal organizations the option to aquire services internally or externally - so a Service Center could actually external as outsourced.

Compiere provides a variety of options to model these concepts. At the center is the Organization entity. In Compiere, you can create unlimited organizational entities. You can define and differentiate different types of organization (Division, Store, Legal Entity, …) and maintain multiple organizational hierarchies (ownership, logistics, reporting, …).  Organizations can be linked to (external) Business Partners for easier management of legal entities as well for outsourced service organizations.

Every transaction (e.g. invoice) requires an organization and that organization is then available for financial reporting.  A document may have actually different organization (e.g. in one invoice you may have the invoice lines split up between sales organizations).

From an accounting perspective, you chan choose, if the organization is a balancing segment. If enabled, Compiere creates automatically the inter-org due-to/due-from balancing accounting entries.  Compiere even enables to automatically create explicit documents via it's Counter Document feature.

Compiere provides two Organization fields - Organization (AD_Org_ID) and Transaction Organizaion (AD_OrgTrx_ID). You can use the latter to maintain information, if you do not want to balance transactions on a low organizational level.  Example here would be to maintain the Organization field on Legel Entity level and the Transaction Organization on Cost Center or Service Center level.   With little effort, you could e.g. customize the system, that you enter information on Cost Center level, and continue to maintain the balancing entries on Legal Entity level.  You could certainly also allow the user to enter the two fields independently.  With minor system customization you can restrict all entries in the Organization field to Legal Entities whereas in the Transaction Org field, you have all organisational entities available or restrict those too.  Depending on the requirements, you can also easily add rules like "The Transaction Organization  must be part (child) of the Organization ".

Hi jyxyt2001,

when you copy content from somewhere you should be so fair and put a link to the source.

Best regards,
Norbert

I am so sorry and i attach the link.
http://www.compieresource.com/2008/10/cost-center-profit-center-service-center-in-compiere.html

Hi Norbert,
        I have already read the article, but I am confused with the transation organization in account scheme element and how to use the organization and transation organization to implement the concepts of cost center,profit center and service center. Could you give me some advice or some writing about cost center,profit center and service center in adempiere.
       Thank you!
       With best wishes.

Hi jyxyt2001,
We have never used the TrxOrg, Jorg janke suggested that it was not complete functionality.  It is very easy to use any other account element (Activity, User List 1 etc) as a cost centre.

Many times you will have a need for multiple cost centres and they may need to share a single warehouse.    In this case it is not good to use Org as a cost centre indicator particularly if each Org has to represent a different company/legal entity.

To use User Element 1 as a cost centre is very easy and works ok.

regards 

Hi Norbert,
       Thank you for your reply.
       I want to use department as a cost center  and use the User Element 1.  So I add a org type 'cost center' and add all departments into sytem, and then set all departments' org type  with 'cost center'. what should i do to find all the departments with only the  'cost center' type'  in User Element 1 ?
       I am so sorry to bother you.
       Best regards,
      
       

If you use organisation as cost centre then you do not need to use the user element 1.  Just use the relevant organisation.  However, you can choose to use the User Element 1 to link to another dimension such as activity to provide you an alternative way to model service (cost) centre.

Mike

Hi Mike
Your post prompted me to re-read and I see that I suggested using User Element 1 when I meant to say UserList 1
The issue we found with Org is usually having multiple CCs sharing one warehouse.
regards
Steven

Hello

Can we rename Activity as 'Cost Center' by keeping the same database table , fields etc. as the original activity.
Do this change create any problem in AD

Thanks
Johnson

Hi Johnson,

Can we rename Activity as 'Cost Center' by keeping the same database table , fields etc. as the original activity. Do this change create any problem in AD

Yes. You can rename fields and windows without problem in ADempiere.

Regards,
Trifon