What Is Cost Center?
A department or function that incurs costs but does not directly generate revenue.
Detailed Explanation
Coding invoices to cost centers enables budget tracking and internal allocation. Examples include HR, IT, and facilities departments.
Example
The marketing department is a cost center, and all agency invoices are coded to its budget.
Why It Matters
Accurate cost center coding drives better budgeting and spend visibility.
Related Resources
Related Accounting Basics Terms
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