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Budgets and cost centers example

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Budgets and cost centers example

The most common business entity to associate financial information to is the cost center.

The example above showed how cost centers can be allocated expenses based on service usage. This example will use that information to compare with a defined budget for the cost centers.

A budget is a placeholder for an amount of planned spending for one or more cost centers. To view an example, navigate to Financial Management > Budgets and select the Investments budget:
Figure 1. Cost Demo Budget
Cost Demo Budget

This budget has a defined start and end date, planned amount, and actual amount. In the Cost Center related list, Trading is a member.

For all expense allocations assigned to the Trading cost center during the budget time periods, the allocations will be totaled to populate the actual budget field. The related expense allocation records can also be viewed in the Expense Allocations related list.