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Almost universally projects use cost centres rather than real money to gain access to funds on the project and for the organisation to allocate and record spending on its projects.

A cost centre is an arbitrary classification for the division of funds within an organisation. It is used to allocate charging to distinct sections of the organisation and to assign a single point of accounting to an identifiable business unit. Human Resources (HR) costs are paid for by the HR team and individuals time is allocated to the project cost centre. The HR team settle the HR account as well as supplier or contractor invoices via internal payment systems while apportioning spend to the project via its cost centre.

Equipment, materials and a collection of other costs such as rentals, consumables and software are apportioned via cost centre. Modern photocopiers often have charging options to allocate a batch of photocopying via cost centre. The various cost centres gradually fill up with project spend as business finances in the form of Organisational Development Budget go to fund direct payment to external and internal supplies. It is the O.D.B. and cost centres we will supervise and scrutinize to understand the costs deployed to the project.

Cost centres will require cost centre maintenance to add, change or delete cost centres across the organisation and to record the owner and funding profile of the cost centre. Cost centres will be established to identify project costs and these give the total project spend. While Cost centres setup to record H.R. costs provide the total H.R. spend. Invariably, organisations demand more complex management information than simply totals from cost centre silos. Cross referencing and merged cost data across the project and across the programme will be used to examine the funding demands of your project. So, let us look at the management of your projects funding.

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