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Dynamics 365 Community / Forums / Small and medium business | Business Central, N... / Cost Centers vs. Dimen...
Small and medium business | Business Central, N...
Answered

Cost Centers vs. Dimensions?

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Posted on by Jknizacky 7

Hello,

Can anyone explain the difference between Cost Center and Dimensions? We currently use Business Central Dynamics 365 and do not have any cost accounting set up, just Chart of Accounts.

I'm looking into implementing cost centers, but noticed dimensions do the job too. We use global dimensions for assigning asset project codes, but that's it.

If I took the path of just creating dimensions, am I limiting the business by not using cost centers? Does it matter?

Thanks!

I have the same question (0)
  • Verified answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at

    moved to the bc forum

  • Verified answer
    Rob F. Profile Picture
    Rob F. 503 on at

    Hi,

    Depending on your needs, using a Dimension as a Department/Cost Center/Profit Center can be very straightforward and you can use the built-in features like default dimensions, allowed dimension values, and dimension combinations to control what can be used with various master data like GL Accounts or Items.  This is what we do with the Global Dimension 2 as a Department Code and it helps drive all our management and financial reporting.  I haven't used the Cost Accounting module with its own Chart of Cost Centers, but I suppose that would be for a more advanced setup where you'd want to keep track of the numbers in a more segregated way from the General Ledger and use features like allocations, etc.

    Rob

  • Jknizacky Profile Picture
    Jknizacky 7 on at

    Thanks Rob!

    I agree that the Cost Accounting module is more advanced. What are you Global Dimension setups currently? I like my original post, we just have the asset project code as the Global Dimension 1 and the machine code as global dimension 2.

  • Verified answer
    Rob F. Profile Picture
    Rob F. 503 on at

    We use Global Dimension 1 for Company Code since we use a single NAV/BC company to do the accounting for multiple legal entities, and we use Global Dimension 2 for Department Code, which is treated like either a profit center or cost center depending on the specific department.  We also use a Shortcut Dimension for tagging expenses with employee names, and another for linking Job Task Nos. (which we use as internal project cost codes) to Fixed Assets Nos.

  • Jknizacky Profile Picture
    Jknizacky 7 on at

    Is it bad that the Department code will NOT be a Global Dimension? I know it's ill-advised to edit/change global dimensions.

  • Suggested answer
    Teddy Herryanto (That NAV Guy) Profile Picture
    Teddy Herryanto (Th... 14,284 Super User 2025 Season 2 on at

    You don't need to have Department as global dimension. I normally suggest the most often used dimension as global.

    You can also change your global dimension. Just need to make sure that all the PTE extension will work.

  • Rob F. Profile Picture
    Rob F. 503 on at

    I think that decision depends on your specific business requirements, especially the extent and importance of the various dimensions that are in use at your company.  The Global Dimensions are visible in more areas of the system, so if Department is one of your primary dimensions that is used frequently with transactions and/or in reports, then it might be a good idea to set it as Global.  However, I have seen on the AppSource site that there are several third party add-ons for Business Central that can make the Shortcut Dimensions more visible as well, so that would be something to consider if you've already setup your Global Dimensions and do not want to change them.

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