# Setup Cost Centers

**YouTube:** [Cost Centers in Logic ERP](https://www.youtube.com/watch?v=XXbTnYecHx4)

## Cost Centers in Logic ERP

A **cost center** is a unit within an organization that incurs costs but does not directly contribute to profits. It helps in tracking actual expenses and comparing them with the budget. This tutorial will guide you through the process of setting up and using cost centers in **Logic ERP**.

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### **Setting Up Cost Centers in Logic ERP**

* Navigate to the Setup\Setup Accounts and then click on "Setup Cost Centers".
* **Create Cost Elements** (Nature of Cost)
  * Right-click on **Cost Element** and select **Add Cost Element**.

<figure><img src="/files/fgyg6V315r0KydhDFSJu" alt=""><figcaption><p>This picture illustrates the process of creating a <strong>Cost Element</strong> in Logic ERP.</p></figcaption></figure>

* Define the nature of cost, such as **Salary** or **Advertisement**.
* Repeat the process to create additional cost elements as needed.
* **Create Cost Centers and Allocate Cost Elements**
  * Right-click on **Cost Centers** and select **Add Cost Center**.

<figure><img src="/files/L7N6rpYjn7XwObLtSJo2" alt=""><figcaption><p>This picture illustrates the process of creating a <strong>Cost Center</strong> in Logic ERP.</p></figcaption></figure>

* Allocate the relevant **cost elements** (e.g., Advertisement expenses assigned to Marketing Cost Center).

<figure><img src="/files/CnCgMj4hB6amEFyYP3WV" alt=""><figcaption><p>This picture illustrates how you can allocate a <strong>Cost Element</strong> in Cost Center.</p></figcaption></figure>

### **Applying Cost Centers in Transactions**

* **Create a Payment Voucher**
  * Open the **Payment Voucher** window.
  * In the **Cost Center** column, press the **spacebar** to select the appropriate cost center.

<figure><img src="/files/Mg399l2nnxqPqOomJn21" alt=""><figcaption><p>This picture illustrates how you can make a <strong>Cost Center-wise Payment Entry</strong> in Logic ERP.</p></figcaption></figure>

* **Create a Cash Payment Voucher**
  * Follow the same process as above to allocate costs in **Cash Payment Voucher**.

### **Viewing Cost Center Reports**

* Navigate to the Reports/Queries/Financial Analysis and then click on "Cost Centre Wise Analysis"
* **Filter and Analyze Data**
  * Use **Cost Element and Cost Center filters** to view specific reports.
  * The report provides a clear **breakdown of income and expenses** across different cost centers.

<figure><img src="/files/QzMvnEebF3M9MJnzzYSg" alt=""><figcaption><p>Here, you can see that the software has generated a <strong>Cost Center-wise Payment Entry Report</strong>.</p></figcaption></figure>

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#### **Conclusion**

Logic ERP's cost center feature helps businesses efficiently **track expenses, allocate costs, and analyze financial performance** for better decision-making.<br>


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